- (TCO D) When there is a production constraint, a company should emphasize the products with:
the highest unit contribution margins
the highest contribution margin ratios
the highest contribution margin per unit of constrained resource
the highest contribution margins and contribution margin ratios - (TCO D) Lindon Company uses 5,000 units of Part X each year as a component in the assembly of one of its products. The company is presently producing Part X internally at a total cost of $80,000 as follows:
Direct Materials………………………………………..$18,000
Direct Labor………………………………………………20,000
Variable Manufacturing Overhead………………. 12,000
Fixed Manufacturing Overhead………………….. 30,000
Total Costs……………………………………………….80,000
An outside supplier has offered to provide Part X at a price of $13 per unit. If Lindon stops producting the part internally, one-third of the manufacturing overhead would be eliminated.
Required: Prepare a make or buy analysis showing the annual advantage or disadvantage of accepting the outside supplier’s offer.
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https://brainmass.com/business/business-management/93630
Attachments C104.doc
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- (TCO D) When there is a production constraint, a company should emphasize the products with:
the highest unit contribution margins
the highest contribution margin ratios
the highest contribution …
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