Freeman Electronics currently produces the shipping containers it uses to deliver the electronics products it...
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Accounting
Freeman Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,400 containers follows. Unit-level materials $ 5,000 Unit-level labor 6,000 Unit-level overhead 3,400 Product-level costs* 7,800 Allocated facility-level costs 26,500 *One-third of these costs can be avoided by purchasing the containers. Baxi Container Company has offered to sell comparable containers to Freeman for $2.60 each. Required a-1. Calculate the total relevant cost. a-2. Should Freeman continue to make the containers? Yes No b-1. Freeman could lease the space it currently uses in the manufacturing process. If leasing would produce $12,600 per month, Calculate the total avoidable costs. b-2. Should Freeman continue to make the containers? Yes No
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