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Current Designs faces a number of important decisions that require incremental analysis. One of Current Designs' competitive advantages is found in the ingenuity of its owner and CEO, Mike Cichanowski. His involvement in the design of kayak molds and production techniques has led to Current Designs being recognized as an industry leader in the design and production of kayaks. This ingenuity was evident in an improved design of one of the most important components of a kayak, the seat. The "Revolution Seating System' is a one-of-a-kind, rotating axis seat that gives unmatched, full-contact, under-leg support. It is quickly adjustable with a lever-lock system that allows for a customizable seat position that maximizes comfort for the rider. Having just designed the "Revolution Seating System, Current Designs must now decide whether to produce the seats internally or buy them from an outside supplier. The costs for Current Designs to produce the seats are as follows. Direct materials $18 Anit Variable overhead $14 Aunit (a) Direct labor Fixed overhead Current Designs will need to produce 2.850 seats this year, 28% of the fixed overhead will be avoided if the seats are purchased from an outside vendor. After soliciting prices from outside suppliers, the company determined that it will cost $53 to purchase a seat from an outside vendor Direct Materials Dietaber $18 Aunit Prepare an incremental analysis showing whether Current Designs should make or buy the "Revolution Seating System Enter decrease in net income then enter with a negative sign preceding the number or parenthesis, eg -15.000 or (15,0001) $20,000 Make Buy Net Income Increase (Decrease)

Current Designs faces a number of important decisions that require incremental analysis. One of Current Designs' competitive advantages is found in the ingenuity of its owner and CEO, Mike Cichanowski. His involvement in the design of kayak molds and production techniques has led to Current Designs being recognized as an industry leader in the design and production of kayaks. This ingenuity was evident in an improved design of one of the most important components of a kayak, the seat. The "Revolution Seating System' is a one-of-a-kind, rotating axis seat that gives unmatched, full-contact, under-leg support. It is quickly adjustable with a lever-lock system that allows for a customizable seat position that maximizes comfort for the rider. Having just designed the "Revolution Seating System, Current Designs must now decide whether to produce the seats internally or buy them from an outside supplier. The costs for Current Designs to produce the seats are as follows. Direct materials $18 Anit Variable overhead $14 Aunit (a) Direct labor Fixed overhead Current Designs will need to produce 2.850 seats this year, 28% of the fixed overhead will be avoided if the seats are purchased from an outside vendor. After soliciting prices from outside suppliers, the company determined that it will cost $53 to purchase a seat from an outside vendor Direct Materials Dietaber $18 Aunit Prepare an incremental analysis showing whether Current Designs should make or buy the "Revolution Seating System Enter decrease in net income then enter with a negative sign preceding the number or parenthesis, eg -15.000 or (15,0001) $20,000 Make Buy Net Income Increase (Decrease)

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter11: Strategic Cost Management
Section: Chapter Questions
Problem 4CE: Kagle design engineers are in the process of developing a new green product, one that will...
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Current Designs faces a number of important decisions that require incremental analysis. One of Current Designs' competitive advantages is found in the ingenuity of its owner and CEO, Mike Cichanowski. His involvement in the design of kayak molds and production techniques has led to Current Designs being recognized as an industry leader in the design and production of kayaks. This ingenuity was evident in an improved design of one of the most important components of a kayak, the seat. The "Revolution Seating System" is a one-of-a-kind, rotating axis seat that gives unmatched, full-contact, under-leg support. It is quickly adjustable with a lever-lock system that allows for a customizable seat position that maximizes comfort for the rider Having just designed the "Revolution Seating System, Current Designs must now decide whether to produce the seats internally or buy them from an outside supplier. The costs for Current Designs to produce the seats are as follows. Direct materials $18 /unit Variable overhead $14 Junit (a) Current Designs will need to produce 2.850 seats this year, 28% of the fixed overhead will be avoided if the seats are purchased from an outside vendor. After soliciting prices from outside suppliers, the company determined that it will cost $53 to purchase a seat from an outside vendor. Direct labor Fixed overhead Direct Materials Prepare an incremental analysis showing whether Current Designs should make or buy the "Revolution Seating System (Enter decrease in net income then enter with a negative sign preceding the number or parenthesis, eg 15,000 or (15,0001) Direct Labor $18 unit $20,000 Make Buy Net Income Increase (Decrease)
Transcribed Image Text:Current Designs faces a number of important decisions that require incremental analysis. One of Current Designs' competitive advantages is found in the ingenuity of its owner and CEO, Mike Cichanowski. His involvement in the design of kayak molds and production techniques has led to Current Designs being recognized as an industry leader in the design and production of kayaks. This ingenuity was evident in an improved design of one of the most important components of a kayak, the seat. The "Revolution Seating System" is a one-of-a-kind, rotating axis seat that gives unmatched, full-contact, under-leg support. It is quickly adjustable with a lever-lock system that allows for a customizable seat position that maximizes comfort for the rider Having just designed the "Revolution Seating System, Current Designs must now decide whether to produce the seats internally or buy them from an outside supplier. The costs for Current Designs to produce the seats are as follows. Direct materials $18 /unit Variable overhead $14 Junit (a) Current Designs will need to produce 2.850 seats this year, 28% of the fixed overhead will be avoided if the seats are purchased from an outside vendor. After soliciting prices from outside suppliers, the company determined that it will cost $53 to purchase a seat from an outside vendor. Direct labor Fixed overhead Direct Materials Prepare an incremental analysis showing whether Current Designs should make or buy the "Revolution Seating System (Enter decrease in net income then enter with a negative sign preceding the number or parenthesis, eg 15,000 or (15,0001) Direct Labor $18 unit $20,000 Make Buy Net Income Increase (Decrease)
(a) Prepare an incremental analysis showing whether Convent Designs should make or buy the Revolution Seating System Enter decrease in net income then enter with a negative signpreceding the number or parenthese-15,000 or 15.000) Direct Material Dret Laber Variable Manufacturing Com Purchase Price Total Cost Cument Designs should Textbook and Media Question Part Question 3 of 7 Direct Materials Direct Labor Show Transcribed Text S Variable Manufacturing Costs Purchase Price Fixed Manufacturing Costs Total Aval Cost 4 Current Designs should eTextbook and Media Question Part Score > Question Part Score Make 5 1 Make the Revolution Seating Syste A Buy Netcome has Decrease Attempts of 3 s -/10 1 Increase (Decrease (b) The parts of this question must be completed in order. This part will be available when you complete the part above 24
Transcribed Image Text:(a) Prepare an incremental analysis showing whether Convent Designs should make or buy the Revolution Seating System Enter decrease in net income then enter with a negative signpreceding the number or parenthese-15,000 or 15.000) Direct Material Dret Laber Variable Manufacturing Com Purchase Price Total Cost Cument Designs should Textbook and Media Question Part Question 3 of 7 Direct Materials Direct Labor Show Transcribed Text S Variable Manufacturing Costs Purchase Price Fixed Manufacturing Costs Total Aval Cost 4 Current Designs should eTextbook and Media Question Part Score > Question Part Score Make 5 1 Make the Revolution Seating Syste A Buy Netcome has Decrease Attempts of 3 s -/10 1 Increase (Decrease (b) The parts of this question must be completed in order. This part will be available when you complete the part above 24
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