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Author Question: Barber Manufacturing currently makes 2,000 high-end kaleidoscopes each year. Barber has been ... (Read 41 times)

ninaj

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Barber Manufacturing currently makes 2,000 high-end kaleidoscopes each year. Barber has been manufacturing all parts of the units. However, the company has found a manufacturing company that can provide the tubes at a price of $14 each. Since the company's machine that molds the tubes is getting old, the company is considering purchasing the tubes. If the company purchases the tubes, the machine will be idle. Barber's standard cost of the molding process for one unit is listed below.

Direct material$4
Direct labor2
Variable overhead4
Direct fixed overhead (Utility cost for the molding machine)3
Non-differential fixed overhead8
Total Cost21

Required:

Should Barber purchase the tubes or continue manufacturing them? Why?


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Marked as best answer by ninaj on Feb 5, 2023

feiojef

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ninaj

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Reply 2 on: Feb 5, 2023
Thanks for the timely response, appreciate it


phuda

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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