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Golfers, Inc. (Gl) manufactures golf-related equipment including golf balls. This year's expected production of golf balls is 110,000 packs leach consisting of four golf ballsi.
Golfers, Inc. (Gl) manufactures golf-related equipment including golf balls. This year's expected production of golf balls is 110,000 packs leach consisting of four golf ballsi. Cost data are as follows: The full cost of one pack of golf balls is $5.11 . Gl has received an offer from an outside supplier to supply any desired quantity af balls at a price of $5.40 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 Gl 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.) 2-a. At what volume would Gl be indifferent between making and buying? (Do not round intermediate calculations and round your final answer to nearest whole number.) 2-b. What does the indifference point indicate? (Do not round intermediate calculations and round your final answers to nearest whole number.)
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