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Ivanhoe Ranch Inc, has been manufacturing its own finials for its curtain rods. The company...

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Accounting

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Ivanhoe Ranch Inc, has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity. and variable manufacturing overhead is charged to production at the rate of 61% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 32,300 curtain rods per year. A supplier offers to make a pair of finials at a price of $12.90 per unit If Ivanhoe Ranch accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $46,500 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products. (a) Prepare the incremental analysis for the decision to make or buy the finials. (Enter negative amounts using either a negative sign preceding the number eg -45 or parentheses eg. (45).) (b) Should ivanhoe Ranch buy the finials? Ivarhoe Ranchshould the ninials. (c) Would vour answer be different in (b) ir the productive cagacityceleased by not making the finials could be used to produce income of 535,400? iticome would try 5

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