Dough, Re, Mi Inc. sells many different types of cookie dough. The company is deciding whether to continue making its own dough or to outsource. If the company outsources, they will eliminate all of the variable overhead and 30% of the fixed manufacturing overhead. Use the information below to determine whether Dough, Re, Mi Inc. should outsource or not. Data Units Per unit Relevant? Sales price per unit 5,450 $ 104.00 Direct materials per unit 21.00 Direct labor per unit 18.00 Variable manufacturing overhead per unit 15.00 Fixed manufacturing overhead (MOH) : pe
Dough, Re, Mi Inc. sells many different types of cookie dough. The company is deciding whether to continue making its own dough or to outsource. If the company outsources, they will eliminate all of the variable overhead and 30% of the fixed manufacturing overhead. Use the information below to determine whether Dough, Re, Mi Inc. should outsource or not. Data Units Per unit Relevant? Sales price per unit 5,450 $ 104.00 Direct materials per unit 21.00 Direct labor per unit 18.00 Variable manufacturing overhead per unit 15.00 Fixed manufacturing overhead (MOH) : pe
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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| Dough, Re, Mi Inc. sells many different types of cookie dough. The company is deciding whether to continue making its own dough or to outsource. If the company outsources, they will eliminate all of the variable overhead and 30% of the fixed manufacturing overhead. Use the information below to determine whether Dough, Re, Mi Inc. should outsource or not. |
| Data | Units | Per unit | Relevant? | ||||
| Sales price | per unit | 5,450 | $ 104.00 | ||||
| Direct materials | per unit | 21.00 | |||||
| Direct labor | per unit | 18.00 | |||||
| Variable manufacturing overhead | per unit | 15.00 | |||||
| Fixed manufacturing overhead (MOH) : | per month | 21.00 | |||||
| Avoidable fixed MOH | per month | ||||||
| Unavoidable fixed MOH | per month | ||||||
| Sales commissions | per unit | 4.00 | |||||
| Advertising costs | per month | 1.60 | |||||
| Purchase price of outsourced product | per unit | 65.00 | |||||
| Shipping costs of outsourced product | per unit | 2.00 |
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