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Bronson Company estimates that if the supplier's offer were accepted, the direct labor and variable manufacturing overhead costs of the Zippo pen line would be reduced by 10% and the direct materials cost would be reduced by 20%. Under present operations. Bronson Company manufactures all of its own pens from start to finish. The Zippo pens are sold through wholesalers at S6 per box. Each box contains one dozen pens. Fixed manufacturing overhead costs charged to the Zippo pen line total S60.000 each year. (The same equipment and facilities are used to produce several pen lines.) The present cost of producing one dozen Zippo pens (one box) is given below: * Includes both variable and fixed manufacturing overhead, based on production of 150.000 boxes of pens each year. Required: Calculate the total variable cost of producing one box of Zippo pens? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) Calculate the total variable cost of purchasing one box of Zippo pens? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) Should Bronson Company accept the outside supplier's offer? What is the maximum price that Bronson Company should be willing to pay the outside supplier per dozen cartridges? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) Due to the bankruptcy of a competitor. Bronson Company expects to sell 200.000 boxes of Zippo pens next year. As previously stated, the company presently has enough capacity to produce the cartridges for only 150.000 boxes of Zippo pens annually. By incurring S39.000 in added fixed cost each year, the company could expand its production of cartridges to satisfy the anticipated demand for Zippo pens. The variable cost per unit to produce the additional cartridges would be the same as at present. Under these circumstances, how many boxes of cartridges should be purchased from the outside supplier and how many should be made by Bronson? Compute total cost for the following alternatives. (Do not round intermediate calculations. Round your total variable cost per box to 2 decimal places. Omit the "$" sign in your response.) Which alternative is beneficial? Purchase all cartridges externally. Produce the cartridges as per 3a above. Produce all cartridges internally

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