Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. riggs company purchases sails and produces sailboa

Riggs Company purchases sails and produces sailboats. It currently produces 1,230 sailboats per year, operating...

60.1K

Verified Solution

Question

Accounting

Riggs Company purchases sails and produces sailboats. It currently produces 1,230 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Riggs purchases sails at $255 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $94 for direct materials, $80 for direct labor, and $90 for overhead. The $90 overhead is based on $78,720 of annual fixed overhead that is allocated using normal capacity.
The president of Riggs has come to you for advice. "It would cost me $264 to make the sails," she says, "but only $255 to buy them. Should I continue buying them, or have I missed something?
(a)
Prepare a per unit analysis of the differential costs. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g.(45).)
Should Riggs make or buy the sails?
Riggs should
the sails.
image

Answer & Explanation Solved by verified expert
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!
Become a Member

Other questions asked by students

Chemistry
1.2K views

i need a good introduction for a lab report about (isolation of caffeine from No-Doz tablets)...

Chemistry
1.2K views

What comments can you make regarding person's potential for good “long-term” health as it related to...

Civil Engineering
1.2K views

Explain Thomas model and the parameters (A, B, C and D). Discuss Calibration and Validation process and...

General Management
1.2K views

This week you will explore Quality systems, quality control, inspection, quality tools, and quality management. Your assignment...

Basic Math
1.2K views

For the equation given below, complete parts a through c.- 9x + y = 0a....

Basic Math
1.2K views

R 0,-180 is the same rotation asR 0,180R.90, 180R 90,180R 0,90

Statistics
1.2K views

Determine the distribution of the data pictured below Frequency 4 3 2 1 1 2...

Calculus
1.2K views

The table below gives the number of calories for each type of candy in a...

Calculus
1.2K views

Suppose that for a company manufacturing calculators the cost revenue and profit equations are given...

Accounting
1.2K views

please do asap Required information The following...

Accounting
1.2K views

An employee receives a bonus of $10,000.00 paid separately from her regular earnings. Calculate the...

Accounting
1.2K views

Exercise 9-4 (Algo) Prepare a Flexible Budget Performance Report (LO9-4) Vulcan Flyovers offers scenic overflights...