View History Bookmarks People Window Help Hilary S. Ashmen Faculty Home X Pottery Ranch Inc. has been X + edugen.wileyplus.com/edugen/student/mainfr.uni 0 WileyPLUS: MyWileyPLUS I Help Contact Us Los Kimmel, Accounting, 7e PRIN. OF ACCT I&II (ACCT 2101 210 tice Assignment Gradebook ORION Downloadable eTextbook ment CALCULATOR FULL SCREEN PRINTER VERSION * BACK NEXT Exercise 20-05 Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 62% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 30,400 curtain rods per year. A supplier offers to make a pair of finials at a price of $13.15 per unit. If Pottery Ranch accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $43,100 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products. (a) Prepare the incremental analysis for the decision to make or buy the finals. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Make Buy Net Income Increase (Decrease) Direct materials $ Direct labor Variable overhead costs Foxed manufacturing costs Purchase price Total annual cost BB MacBook F2 F4 F6 F7 18 FO # View History Bookmarks People Window Help + X Hilary S. Ashmen Faculty Home X Pottery Ranch Inc. has been m x s://edugen.wileyplus.com/edugen/student/mainfr.uni actice Assignment Gradebook ORION Downloadable eTextbook OF C gnment CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT Variable overhead costs Fixed manufacturing costs Purchase price Total annual cost dy (b) Should Pottery Ranch buy the finals? 6. Pottery Ranch should the finals. (c) Would your answer be different in (b) if the productive capacity released by not making the finals could be used to produce income of $38,6207 Income would by s Click if you would like to show Work for this question: On Show Work Question Attempts: Unlimited SAVE POR LATER SUBMIT ANSWER Polic 2000-2020 Worst Reserved. Ao MacBook F5 F F? FB