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Winona Johnson is the president of Johnson Mfg., which manufactures coats. She is trying to decide whether to make 3,000 Type III coats or purchase
Winona Johnson is the president of Johnson Mfg., which manufactures coats. She is trying to decide whether to make 3,000 Type III coats or purchase them from a sub contractor to fill a rush special order that she just received. There are no marketing costs on the special order. Acceptance of the special order would not necessitate premium pay for overtime work or additional fixed costs. Johnson Mfg. has supplied the following data: any Cost Data for Type III Coats: Sale Price $42 Direct Materials 15 Direct Labor 9 Fixed Mfg. Overhead Variable Mfg. Overhead 6 Variable Marketing Costs Fixed Marketing Costs Fixed Mfg. Overhead 3 Variable Mfg. Overhead 6 Variable Marketing Costs 3 Fixed Marketing Costs 1 Fixed Administrative Overhead 2 Required: (1) At what purchase price per unit would Ms. Johnson be indifferent as to whether her tum manufactured the coats or they were purchased from a subcontractor? (2) What qualitative factors might Influence Ms. Johnson's decision regarding manufacturing the coats or purchasing them? BIA-A- - ID P 2 Editor HTML E x x TT 12 G+ CET II Paragra
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