Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Management Expert

Curtis Corporation is beginning to manufacture Mighty Mint, a new mouthwash in a spray container. The product will be sold to wholesalers and large drugstore chains in packages of 30 containers for $20 per package. Management allocates $225,000 of fixed manufacturing overhead costs to Mighty Mint. The manufacturing cost per package of 30 containers for expected production of 100,000 packages is as follows:
Direct Material $7.50
Direct Labor $4.00
Overhead (fixed and variable) $3.50
Total $15.00

The company has contacted a number of package suppliers to determine whether it is better to buy or manufacture the spray containers. The lowest quote for the containers is $1.85 per 30 units. It is estimated that purchasing the containers from a supplier will save 10 percent of direct materials, 20 percent of direct labor, and 15 percent of variable overhead. Curtis's manufacturing space is highly constrained. By purchasing the spray containers, the company will not have to lease additional manufacturing space, which is estimated to cost $17,000 per year. If the containers are purchased, one supervisory position can be eliminated. Salary plus benefits for this position are $72,000 per year.

REQUIRED

Should Curtis make or buy the containers? What is the incremental cost (benefit) of buying the containers as opposed to making them?

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M928592

Have any Question? 


Related Questions in Business Management

In 300 words or more answer the questions below- why have a

In 300 words or more answer the questions below: - Why have a communications plan? Describe some that you've seen; even unplanned. - Describe the different ways you've seen or heard people manage risk in projects.

1 explain windows command line and forms applications2

1. Explain Windows Command Line and Forms applications? 2. Demonstrate Windows Form design?

Your final project will be to create a program for the 3pi

Your final project will be to create a program for the 3Pi to perform a number of line following tasks. You may not program the robot between tasks but are allowed to provide inputs to the robot before each task.  All li ...

Assume that the government of the state of new jersey has

Assume that the government of the state of New Jersey has determined that a large number of injuries and deaths have occurred as a result of accidents involving the installation and repairs of electrical equipment at pri ...

Application development using aspnet 40 in c or vbplease

Application Development using ASP.NET 4.0 in C# or VB Please note this is a new site and not just a continuation of the Planet Wrox site.  Create the application and/or a web site for a business (choice is yours). You mu ...

Legitimate power belongs to someone who occupies a

Legitimate power belongs to someone who occupies a particular job, office, or position in an organizational hierarchy. Discuss the difference between power and authority; then, present a scenario/situation where it is pr ...

1 total labour supply is fixed at 100 output is produced

1. Total labour supply is fixed at 100. Output is produced using labour and capital; and the short run labour demand curve in the urban sector is LDu-5w and in the rural sector is -5w. Restrictions on labour mobility mea ...

Read conflict and confluence in advertising meetings how

Read "Conflict and Confluence in Advertising Meetings": How can anthropology be used within a business setting? Cite examples https://az149199.vo.msecnd.net/public/SLS_CustomContentFileUploads/CourseMaterial/sql2_bethel_ ...

Discussion board questionyou are the middle manager of a

Discussion Board Question: You are the middle manager of a company, and you recently received news that your company lost a major contract. Such a loss will directly affect your department by reducing the staff by 25%. Y ...

A company manufactures three products a b and c by using

A company manufactures three products: A, B and C by using three resources. Each unit of product x takes six man hours and 0 twenty hours of machine capacity and two cubic meter of storage place. Similarly, one unit of p ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro