Sven Industries, which manufactures and sells a highly successful Ine of summer lotions and insect repetions, has decided to diversity in order to stabilize sares throughout the year. A natural a the company to consider is the production of winter lotions and creams to prevent dry and chapped sk After considerable research, a winter products Ine has been developed. However, Sven's president has decided to introduce only one of the new products for this coming winter if the product is success, further expansion in future years wit be mated The product selected (called Chap-Off) is a lip bain that will be sold in a spstick-type tube. The product will be sold to wholesalers in boxes of 12 hubes for 50 50 per box because of excess capac no additional faed manufacturing overhead costs will be incused to produce the product However, a $110.000 charge for tied manufacturing overhead will be absorbed by the product under the company's absorption costing system Using the estimated sales and production of 100.000 boxes of Chap-Off the Accounting Department has developed the towing cost per box Direct materials Direct labor Manufacturing overhead Total cast $480 1.00 1.40 $730 The costs above include costs for producing both the ip bam and the tube that contains t As an atemave to making the tubes Sven has approached a super t scuss the possomly of purchase the tubes for Chap-Off The purchase price of the empty tubes from the supplier would be $1.20 per box of 12 tubes Sven indes accepts the purchase proosa dred and vaate manufacturing overhead costs per box of Chap-Off would be reduced by 10% and drect matenas costs would be reduced by 20% Required toka vanate cost of producing one box of Chap-C (De not round intermediate calculations. Round your answer to 2 decimal places 1c Should Saven Industries make or buy the tubes? Make Bay 2. What would be the maximum purchase price acceptable to Seven Industries? (Do not round intermediate calculations. Round your answer to 2 decimal places.) pudhase price per box 3. Instead of sales of 100.000 boxes, revised estimates show a sales volume of 115,000 boxes. At this new volume, additional equipment must be acquired to manufacture the tubes of $32.000 Assume that the outside supplier will not accept an order for less than 115.000 boxes a Calculate the total relevant cost of making 115,000 boxes and total relevant cost of buying 115,000 boxes (Do not round intermediate calculations.) Making Buying Total cost Based on the above cautions should Seven Industries make or buy the boxes? 1300 20 A Reter to the data in above Assume that the outside supper will accept an onder of any sue for the tubes at $1.20 per box Which of these is the best atenative MO X etombeducation.com/hm.px?-0.999700690015905, 1649467869236 C Shen Indotes Which Manus Xx Making Duying Total cost + b. Based on the above calculations, should Seven Industries make or buy the boxes? O Make 7 By 4. Refer to the data in (3) above. Assume that the outside suppler will accept an order of any size for the tubes at $1.20 per box Which of these is the best ateina O Maka all 115.000 boxes O Buy all 115,000 boves O Make 100,000 boxes and buy 15.000 boxes Make 32.000 boxes and bury 32.000 boxes References eBook & Resources Worksheet