Answer the following question: Mrzek Inc. manufactures snowboards. Its cost of making 3,500 bindings is...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Answer the following question:
Mrzek Inc. manufactures snowboards. Its cost of making 3,500 bindings is as follows:
Direct materials $35,200
Direct labour 4,950
Variable manufacturing overhead 6,820
Fixed manufacturing overhead 14,630
Total manufacturing costs $61,600
The company may also choose to purchase the bindings from a supplier at $15 each. It will pay $1.80 per unit to transport the bindings to its manufacturing plant and then add its own logo at a cost of $0.20 per binding. Purchasing the bindings from outside will enable the company to avoid $6,500 of fixed overhead.
Required:
1. Using the incremental analysis for outsourcing decision, how much is the total cost difference of buying bindings from outside vs. making it on site?
Round your answer to whole amount.
2. Which option should the company choose, making the bindings or buying the bindings?
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.