Silven Industries, which manufactures and sells a highly successful tine of summer lotions and insect repellents, has decided to diverstify in order to stablize sales throughout the year A natural area for the company to considor is the production of winter lotions and creams to prevent dry and chapped skin Ater considerable research, a wnter products line has been developed However Siven's presidont has decided to Introduce only one of the new products for this coming wintec If the product is a success, further expansion In future years will be Intilated. Tha product selected (called Chap-Off) is a tp balm that will be sold in a Ipstick-type tube. The product will be sold to wholesalors in boxes of 24 tubes for $t1 per box Because of excess capacity, no addtional foxed manufacturing overhead costs will be Incurred to produce the product However, a $94.500 charge for fixed manufacturing overhead will bo absorbed by the product under the company's absorption costing system Using the estimated salas and production of 105.000 boxes of Chap-Off, the Accounting Department has developed the following manufacturing cost per bax birect naterial .28 Hanufacturing everhead 2.08 Total cost Thecosts above relate to making both the lip barn andthe tube that continAsanatenative to making the tube Cu ot Siven has approached a suppher to deouss the possiblity cf buying the tubes. The purchase price of the supplier's empry tubes bo $200 per bax of 24 tubes. H Sliven Industries stops making the tubes and buys them from the ousside suppier, its direct abor and varlable manufacturing overhead costs per bax of Chap-Off would be reduced by 10P% and irs direct matertals costs would bo reduced by 30% Required t. If Sitven bys its tubes from the ousside supplier, how much of ins own Chap-Off manufacturing costs per box w bo able to avold? Hint You need to separate the manufacturing overhead of $200 per box that is shown above Into its variable and fixed components to derive the crrect answer 2 What is the foancal advantage (disodvantage) per bax of Chap-Off if Siven buys its tubes from the outside suppler? 3 What is the fnaricial advantage (disadvartage) in sotal (nat per bo if Siven buys 105.000 baves of tubes from the outside supplier? 4 Should Siven Iydustrsec make or buy the tubec? 5 What is the maxmum price that Silven should be wiling to pay the ousaide supplter for a bax of 24 tubes? 6. instead of sales cf 105,000 boxes of tube, revised estimates show a sales volume of 131,000 boes of tubes. At this higher sales volume Siven Acsuming that the disadva Sliven Industnes make or buy the ubec? 7 Refer to the data in (6) above Assume that the ousside supplier wa accept an order of any size for the tubes at a price of $200 per box How imany boxes oi tubes trould Sitven make? How many boxes of tubes should it buy from the outside suppler? need to rent extra equlpment at a cost of $46,000 per year to make the additional 26,000 boxes of tubes supplier will nat accept an order for less than 131,000 boxes of tubes. what is the financral advantage artage) In total hot per bong fSiven buys 131,000 baxes of tubes from the outside supplier? Gven this new Information, should Req 1 Req 2 Req 4 Req 5 Req Req 7 If Silven buys its tubes from the outside supplier, how much of its own Chap-Off manufacturing costs per box will it be able to avoid? (Hinc: You need to separate the manufacturing overhead of $2.00 per box that is shown above into its variable and foxed components to derive the correct answer.) (Do not round intermediate calculations. Round your answer to 2 decimal bgsts per box of Chap-Off Req2 > Req 4 Req 5 Req 6 Req 7 Reg 1 Req 2 Req 3 what is the financial advantage (disadvantage) per box of Chap-Off if Silven buys its tubes from the outside supplier? (Do not round intermediate calculations. Round your answer to 2 decimal places.) per box Req1 Req3 > Req 1 Req 2 Req Req 4 Req 5 Req 6 Req 7 s the financial advantage (isadvantsge) in total (not per box) if Silven buys 105.000 boxes of tubes from the outside supplier? K Req2 Assuming that the outside supplier wall not accept an order for less than 131,000 boxes of tubes, what is the financial advantage diadvantage) In total (not per box) If Sllven buys 131,000 boxes of tubes from the outside supplier? Given this new Information, should Siliven Industrles make or buy the tubes? 7. Refer to the data In (6) above. Assume that the outslde supplier will accept an order of any size for the tubes at a price of $2.00 per box. How many boxes of tubes should Siliven make? How many boxes of tubes should it buy from the outside supplie? Complte this question by entering your answers in the tabs below Req 1 Req 2 Req 3 Req Req 5 Req Req 7 Should Silven Industries make or buy the tubes? Req3 Req5 > K Prey 5 or 5 Neat have decided to ume ot 131.000 boxes of tubes. At this higher salea W00i8 8ed to rent extra equlpment at a cost of $46.000 per year to make the additional 26,000 boxes of tubes in total (not per box) if Silven buys 131.000 boxes of tubes from the outside supplier? Given this new information Assuming that the outside suppliler will not accept an order for less than 131000 boxes of tubes, what is the financial advantage should Silven Industries make or buy the tubes? 7 Refer to the data In (6) above. Assume that the outside supplier will accept an order of any size for the tubes at a price of $200 per box How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? Complete this question by entering your answers in the tabs below. Req 2 Req 3 Req 4 Req Req 6 Req 7 What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? (Do not round intermediate elculations. Round your answer to 2 decimal places.) per box K Req 4 Req6 > Prev 5or Next Complete this question by entering your answers in the tabs below. Reg Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Instead pf sales of 105,000 boxes of tubes, revised estimates show a sales volume of 131,000 boxes of tubes. At this higher sales volume. Silven would need to rent extra equipment at a cost of $46,000 per year to make the additional 26,000 baxes of tubes. Assuming that the outside supplier will not accept an order for less than 131,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 131,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes? Show leas& Make or buy the baxes of tubes? K Req 5 Req7 K Prev 5or5 Ned have decided to ext 7. Refer to the data in (6) above. Assume that the outside suppl lier will accept an order of any size for the tubes at a price of $2.00 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside suppler? Complete this question by entering your answers in the tabs below. Req 2 Req 3 Req 4 Req 5 Req 7 Refer to the data in (6) above. Assume that the outside supplier wil accept an order of any size for the tubes at a price of $2.00 per boox. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? (Round your intermediate calculations to 2 decimal places.) Number of boxes cf tubes manufactured by Silven Number of boxes of tubes purchased from the outside supplier Req 6