Oficina Bonita Company manufactures office furniture. An unfinished desk is produced for $34.10 and sold for $65.95. A finished desk can be sold for $74.00. The additional processing cost to complete the finished desk is $6.45. Prepare a differential analysis. Round your answers to two decimal places. Differential Analysis Sell Unfinished (Alternative 1) or Process Further into Finished (Alternative 2) Desks Revenues per desk Costs per desk Profit (loss) per desk Sell Unfinished Desks (Alternative 1) Process Further into Finished Desks (Alternative 2) Differential Effects (Alternative 2) Should the company sell unfinished desks or process further and sell finished desks? Oficina Bonita Company should (

Oficina Bonita Company manufactures office furniture. An unfinished desk is produced for $34.10 and sold for $65.95. A finished desk can be sold for $74.00. The additional processing cost to complete the finished desk is $6.45. Prepare a differential analysis. Round your answers to two decimal places. Differential Analysis Sell Unfinished (Alternative 1) or Process Further into Finished (Alternative 2) Desks Revenues per desk Costs per desk Profit (loss) per desk Sell Unfinished Desks (Alternative 1) Process Further into Finished Desks (Alternative 2) Differential Effects (Alternative 2) Should the company sell unfinished desks or process further and sell finished desks? Oficina Bonita Company should (

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 3BE: Make or buy A company manufactures various-sized plastic bottles for its medicinal product. The...

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Boston Executive. Inc., produces executive limousines and currently manufactures the mini-bar inset at these costs: The company received an offer from Elite Mini-Bars to produce the insets for $2,100 per Unit and supply 1,000 mini-bars for the coming years estimated production. If the company accepts this offer and shuts down production of this part of the business, production workers and supervisors will be reassigned to other areas. Assume that for the short-term decision-making process demonstrated in this problem, the companys total labor costs (direct labor and supervisor salaries) will remain the same if the bar inserts are purchased. The specialized equipment cannot be used and has no market value. However, the space occupied by the mini bar production can be used by a different production group that will lease it for $55,000 per year. Should the company make or buy the mini-bar insert?
Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?
Colin OShea has a carpentry shop that employs 4 carpenters. Colin received an order for 1,000 coffee tables. The coffee tables have a round table top and four decorative legs. An offer for $500 per table was received. Colin found an unfinished round table top that he could buy for $50 each. A. Using this quantitative cost data to make the table top, should Colin buy the table top or make it? B. What qualitative factors would be included in your decision. B. Can the vendor make it to the same quality standards? Can it be completed on time? Is there idle capacity in the factory that could be used?
Regal Executive, Inc., produces executive motor coaches and currently manufactures the cent awnings that accompany them at these costs: The company received an offer from Saied Tents to produce the awnings for $3,200 per unit and supply 1,000 awnings for the coming years estimated production. If the company accepts this offer and shuts down production of this part of the business, production workers and supervisors will be reassigned to other areas. Assume that for the short-term decision-making process demonstrated in this problem, the companys total labor costs (direct labor and supervisor salaries) will remain the same if the bar inserts are purchased. The specialized equipment cannot be used and has no market value. However, the space occupied by the awning production can be used by a different production group that will lease it for $60,000 per year. Should the company make or buy the awnings?
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