Homework Sourseeztomheducation com Accounting Web Slice Gallery 99 Names of
ezto.mheducation com Accounting Web Slice Gallery 99 Names of A. .teric Online AC live NelsonBrain- My Home login.aro Windows H-streaming Personnaliser les liens Google BMO Bank of...ine Banking Apple Bing Aplia Yahoo Chapter 9 Quiz for Marks (15%) Chegg Study Guided Solutions and Study Help Chegg.com ID tion Com g Web Slice Galle... Chegg.com 1. Golfers, Inc. (GI) manufactures golf related equipment Iincluding golf balls. This year\'s expected production of golf balls is 110,000 packs (each consisting of four golf balls). Cost data are as follows: Per Pack 110,000 Packs Product cosls directly traceable to balls: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead $2.20 $242,000 44,000 22,000 92,400 23,100 0.40 0.20 General allocated overhead 423,500 The full cost of one pack of golf balls is $3.85·Gl has received an offer from an outside supplier to supply any desired quantity of balls at a price of $4.00 per pack of four golf balls. The cost accounting department has provided the following information: a. The direct fixed manufacturing overhead is the cost of leasing the machine that stamps out the balls. The machine can produce a maximum of 500,000 balls per year. f the balls are bought, the machine will no longer be needed. b. No other costs will be affected Required 1. Prepare an analysis showing whether Gl would be better off making or buying the bails at a projected volume of 110,000 packs (440,000 golf balls). (Round \"Per Unit\" answers to 2 decimal places.) 110,000 packs Per Unit Make Buy Purchase Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead General a located overhead Total costs 
Solution
1) 110000 Packs Per Unit Make Buy Difference Purchase $ 4.00 $ 440,000 $ 440,000 Direct materials $ 2.20 $ 242,000 $ - $ (242,000) Direct labor $ 0.40 $ 44,000 $ - $ (44,000) Variable manufacturing overhead $ 0.20 $ 22,000 $ - $ (22,000) Fixed manufacturing overhead $ 92,400 $ - $ (92,400) General allocated overhed $ 23,100 $ 23,100 $ - Total costs $ 423,500 $ 463,100 $ 39,600 2-b) Let the volume of indifference be \'x\'. It would be the number of units for which the total cost for buy or make will be equal. Total cost for buy = 4*x+23100 Total cost to make = 2.8*x+92400+23100 Equating the above two quantities, we have 4*x+23100=2.8*x+92400+23100 Solving for x 4*x = 2.8*x + 92400 1.2x = 92400 x = 77000 - Volume for indifference. CHECK: 77000 Packs Per Unit Make Buy Purchase $ 4.00 $ 308,000 Direct materials $ 2.20 $ 169,400 $ - Direct labor $ 0.40 $ 30,800 $ - Variable manufacturing overhead $ 0.20 $ 15,400 $ - Fixed manufacturing overhead $ 92,400 $ - General allocated overhed $ 23,100 $ 23,100 Total costs $ 331,100 $ 331,100 2-b) It will cost more to buy if the quntity exceeds 77000 packs It will cost more to make if the quantity is below 77000 packs 3) Probability of interruptions in supply. Current price and changes in price. Alternative use for facilities freed up. Ability to maintain quality of tennis balls. Any labor or producion issues that may happen.