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Worcester Wallpaper Incorporated manufactures quality wallpaper. They are considering buying the glue for the back of the wallpaper rather than producing it. The costs to
Worcester Wallpaper Incorporated manufactures quality wallpaper. They are considering buying the glue for the back of the wallpaper rather than producing it. The costs to manufacture the glue for each roll of wallpaper are as follows: Direct Materials $0.90, Direct Labor $0.50, Variable Factory Overhead $0.45, Fixed Factory Overhead $0.30. The price to purchase the glue (per roll) is $1.75. Should Worcester make or buy the glue, and why should it make or buy the glue? a.) Make the glue; buying would net a $0.22 loss per roll b.) Buy the glue; buying will net them a $0.25 cost saving per roll c.) Make the glue; buying would net a $0.15 loss per roll d.) Buy the glue; buying will net them a $0.10 cost saving per rollAiken Cellular has done some research and believes it can be competitive by selling a smartphone for $800, that it plans to manufacture. If Aiken desires a 45% profit on the smartphone, what is the target cost of manufacturing the new smartphone? a.) $650.00 b.) $440.00 c.) $360.00 d.) $800.00
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