LUS Help I S corge mason University, le & Practice Assignment Gradebook ORION As

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LUS Help I S corge mason University, le & Practice Assignment Gradebook ORION Assignment tart Time: 07:23 PM/ Remaining: 99 min CES CALCULATOR PRINTER VERSION BACK NEXT Question 1 pany purchases sails and produces sailboats. It currently produces 1 23 sails at $275 each, but the company is considering using the excess capacity to manufacture the sails instead. direct labor, and $90 for overhead. The $90 overhead is based on $78,400 of annual fixed overhead that is allocated using normal capa 0 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Bramble purchases The manufacturing cost per sail would be $94.33 for direct materials, $80.41 for The president of Bramble has come to you for advice. "It would cost something?" me $264.74 to make the sails," she says, "but only $275 to buy them. Should I continue buying them, or have I missed dy Prepare a per unit analysis of the differential costs. (Round answers to 2 decimal places, e.g. 15.25. If amount decreases net income then enter the amount using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Net Income Increase (Decrease) Make Sails Buy Sails Direct material 94.33 94.33 Direct labor 80.41 80.42 Variable overhead Purchase price Total unit cost 275 (275) 275 Should Bramble make or buy the sails? Bramble should the sails Version 4.24.5.1

Explanation / Answer

Make Sails Buy Sails Net Income Increase (Decrease) Direct Materials 94.33 0 94.33 Direct Labour 80.41 0 80.41 Variable overheads 0 0 0 Purchase Price 0 275 -275 Total Unit Cost 174.74 275 -100.26 Bramble should make sails

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