Triike company has offered to sell to unicorn magic 10000

Reference no: EM13606100

Unicorn Magic manufactures a part for use in its production of stuffed toys. When 10,000 items are produced, the costs per unit are:

Direct materials $0.60
Direct manufacturing labour 3.00
Variable manufacturing overhead 1.20
Fixed manufacturing overhead 1.60
Total $6.40

Triike Company has offered to sell to Unicorn Magic 10,000 units of the part for $6.00 per unit. The plant facilities could be used to manufacture another item at a savings of $9,000 if Unicorn Magic accepts the offer. In addition, $1.00 per unit of fixed manufacturing overhead on the original item would be eliminated.

Required:Which alternative (make or buy) is best for Unicorn Magic? Why?

Reference no: EM13606100

Questions Cloud

Lancer audio produces a high end dvd player that sells for : lancer audio produces a high end dvd player that sells for 1250. total operating expenses for july were as followsunits

Customer accounts are collected 50 in the month of sale and : munson company reported the following information for 2011 october november december budgeted sales 930000 870000

An airplane undergoes the following displacements first it : an airplane undergoes the following displacements first it flies 87 km in a direction 40 east of north. next it flies

Mac inc which was created in 1962 has yielded the following : mac inc. which was created in 1962 has yielded the following percentage returns on its stock for the last 5 years 13.2

Triike company has offered to sell to unicorn magic 10000 : unicorn magic manufactures a part for use in its production of stuffed toys. when 10000 items are produced the costs

A baseball player hits a triple and ends up on third base : a baseball player hits a triple and ends up on third base. a baseball diamond is a square each side of length 29 m with

Swish company is highly automated and uses computers to : swish company is highly automated and uses computers to control manufacturing operations. the company has a job-order

Suppose a company had the following stock outstanding and : suppose a company had the following stock outstanding and retained earnings on december 31 2011. common stock par 7

An important measure of the performance of a locomotive is : an important measure of the performance of a locomotive is its adhesion which is the locomotives pulling force as a

User Account

All Pages