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Author Question: Sarasota Bicycles has been manufacturing its own wheels for its bikes. The company is currently ... (Read 97 times)

Arii_bell

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on: Mar 6, 2021
Sarasota Bicycles has been manufacturing its own wheels for its bikes.  The company is currently operating at 100% capacity, and variable manufacturing overhead is charged to production at the rate of 30% of direct labor cost.  The direct materials and direct labor cost per unit to make the wheels are $3.00 and $3.60 respectively.  Normal production is 200,000 wheels per year.

A supplier offers to make the wheels at a price of $8 each.  If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated, but the $84,000 of fixed manufacturing overhead currently being charged to the wheels will have to be absorbed by other products.

Required:
a.Prepare an incremental analysis for the decision to make or buy the wheels.
b.Should Sarasota Bicycles buy the wheels from the outside supplier?  Justify your answer.
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by Arii_bell on Mar 6, 2021

cegalasso

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Reply #1 on: Mar 6, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Arii_bell

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Reply 2 on: Mar 6, 2021
Great answer, keep it coming :)

strudel15

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Reply 3 on: Yesterday
Gracias!

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