Solutions Guide: Please do not present as your own. I sometimes post solutions that are totally mine, from the book’s solutions manual, or a mix of my work and the books solutions manual. But this is only meant as a solutions guide for you to answer the problem on your own. I recommend doing this with any content you buy online whether from me or from someone else.
CASE 13–30 Make or Buy; Utilization of a Constrained Resource [LO1, LO3, LO5] Garrison, Noreen & Brewer. 13th edition Managerial Accounting. Entire case.TufStuff, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of the company’s
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2. Students may have answered this question assuming that direct labor is a variable cost, even though the case strongly hints that direct labor is a fixed cost. The solution is shown here assuming that direct labor is fixed. The solution assuming that direct labor is variable will be shown in part (4).
| |Solution assuming direct labor is fixed |
| | | |Manufactured |
| | |Purchased WVD Drums |WVD Drums |Bike Frames |
| |Selling price |$149.00 |$149.00 |$239.00 |
| |Variable costs: | | | |
| |Direct materials |138.00 |52.10 |99.40 |
| |Variable manufacturing overhead |0.00 |1.35 |1.90 |
| |Variable selling and administrative | 0.75 |