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Taek Golfers, Inc. (Gl) manufactures golf-related equipment including golf balls. This year's expected production of golf balls is 110,000 packs (each consisting of four golf
Taek Golfers, Inc. (Gl) manufactures golf-related equipment including golf balls. This year's expected production of golf balls is 110,000 packs (each consisting of four golf balls). Cost data are as follows: Per 110,000 Pack Product conta directly traceable to balls Direct materials $2.50 $ 275,000 Direct labour 165,000 Variable manufacturing overhond 0.20 22.000 Pixed manufacturing overhead 35,200 General allocated overhead 51,700 548,900 1.50 The full cost of one pack of golf balls is $4.99. Gl has received an offer from an outside supplier to supply any desired quantity of balls at a price of $5.80 per pack of four golf balls. The cost accounting department has provided the following information: a. The direct fixed manufacturing overhead is the cost of leasing the machine that stamps out the balls. The machine can produce a maximum of 500,000 balls per year. If the balls are bought, the machine will no longer be needed. b. No other costs will be affected. Required: 1. Prepare an analysis showing whether I would be better off making or buying the balls at a projected volume of 110,000 packs (440,000 golf balls). (Round "Per Unit" answers to 2 decimal places.) 110,000 packs Make Buy Per Unit Difference Purchase Direct materials Direct labour Variable manufacturing overhead Foxed manufacturing overhead
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