PROBLEM 14-21 Make or Buy Decision [LO3] Silven Industries, which manufactures and sells a highly...
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PROBLEM 14-21 Make or Buy Decision [LO3] Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin. research, a winter products line has been developed. However, Silven's president has decided to introduce only one of the new products for this coming winter. If the prod- After uct is a success, further expansion in future years will be initiated. Off) is a lip balm that will be sold in a lipstick-type tube. Ihe product will be sold to wholesalers in boxes of 24 tubes for $8 per box. Because of excess capacity, no additional fixed manufacturing overhead costs will be incurred to produce the product. The product selected (called Chap-Of
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