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The Uniforever Corporation sells a lip balm called Fruity which is sold in a lipstick-type tube. The company manufactures both the empty tube and the
The Uniforever Corporation sells a lip balm called Fruity which is sold in a lipstick-type tube. The company manufactures both the empty tube and the lip balm that goes in the tube. The product will be sold to wholesalers in boxes of 150 tubes for $760 per box. Fixed costs of $720,000 will be allocated to this product. Expected sales and production volume is 72,000 boxes of Fruity. The following are the costs of production per box. Direct labor $200 per box Direct materials $270 per box Total overhead (variable and fixed) $160 per box Total $630 per box Uniforever Corporation has approached a supplier to discuss the possibility of purchasing empty tubes. The purchase price of the empty tubes from the
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