Chapter 13 Homework 1

Chapter 13 Homework 1 - Any more than that, they would be...

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Chapter 13 Problem 19 1. Total manufacturing per box of pens $0.80 Fixed manufacturing overhead per box 0.50 Variable overhead 0.30 Total Variable Cost: DM $1.50 DL 1.00 Variable Overhead 0.30 $2.80 Cost when purchased from outside supplier: DM ($1.50 x .80) $1.20 DL ($1.00 x .90) .90 Variable Overhead ($0.30 x .90) .27 Cartridges .48 $2.85 No, buying from an outside supplier would cost 5 cents more per box 2. The maximum price they should be willing to pay is $0.43 per box.
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Unformatted text preview: Any more than that, they would be losing money. 3. Produce all: (150,000 x $0.43) + $30,000 = $94,500 Produce and buy: (100,000 x $0.43) + (50,000 x $0.48) = $67,000 Buy all: (150,000 x $0.48) = $72,000 They should produce to capacity and purchase the rest 4. The ability of the supplier to meet changes in demand, the quality of the suppliers cartridges, what the saved time can be used for...
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