Silver Industries, which manufactures and sells ahhy Successful line of summer times and insect repellents, has decided to diversity in and chapped slon der in size sales throughout the year A natural area for the company to consider is the production of winter lotions and creams to prevent dry After considerable research, a winter products line has been developed. However, Silven's president has decided to introduce only one of the new products for this coming winter. If the product is a success, further expansion in future years will be initiated. The product selected called Chap Of) is a lip balm that will be sold in a lipstick type tube. The product will be sold to wholesalers in boxes of 16 tubes for $6.60 per box. Because of excess capacity, no additional fixed manufacturing overhead costs will be incurred to produce the product However a $120.000 charge for fixed manufacturing overhead wil be absorbed by the product under the company's absorption costing system. Using the estimated sales and production af 100 000 trxes of Chap-on the Accounting Department has developed the following cost per box Direct materiale Direct labor Manufacturing overhead Total cost The costs above include costs for producing both the lip balm and the tube that contains it. As an alternative to making the tubes, Silven has approached a supplier to discuss the possibility of purchasing the tubes for Chap-on. The purchase price of the empty tubes from the supplier would be so ao per box of 16 tubes. If Silven Industries accepts the purchase proposal, direct labor and vanable manufacturing overhead costs per box of Chap Off would be reduced by 10% and direct materials costs would be reduced by 20% Required: 1a Calculate the total variable cost of producing ane bax of Chap-Off? Do not round intermediate calculations. Round your answer to 2 decimal places.] Tulal variable cost $ 420i per box 1b. Assume that the tubes for the Chap-Off are purchased from the outside suppler, calculate the total variable cost of producing one box of Chap-OT? (Do not round Intermediate calculations. Round your answer to 2 decimal places. Total variable costs 430 per box 1c Should Silven Industries make or buy the tubes? Buy 2 What would be the maximum purchase price acceptabile la Silver Industries? (Do not round intermediate calculations. Round your answer to 2 decimal places. maximum purchase price C iper box 3. Instead of sales of 100,000 boxes, revised estimates show a sales volume of 126,000 boxes. At this new volume, additional equipment must be acquired to manufacture the tubes at an annual rental of $25,000. Assume that the outside supplier will not accept an order for less than 126,000 boxes a. Calculate the total relevant cost of making 126,000 boxes and total relevant cost of buying 126,000 boxes. (Do not round intermediate calculations.) Making Buying $ 511,800 Total b Based on the above calculations, should Silven industries make or buy the boxes? Make Buy 4. Refer to the data in (3) above. Assume that the outside suppiler will accept an order of any size for the tubes at 50.80 per box. Which of these is the best alternative? Make all 126 000 boxes Buy al 126 000 boxes Make 100.000 buses and buy 26,000 boxes O Make 26.000 boxes and buy 26,000 boxes