Business, 22.04.2020 23:03 ahmedeldyame

Arigold Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 62% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.98 and $4.78, respectively. Normal production is 30,400 curtain rods per year. A supplier offers to make a pair of finials at a price of $13.16 per unit. If Marigold accepts the supplier’s offer, all variable manufacturing costs will be eliminated, but the $43,100 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products. Required:a. Prepare an incremental analysis to decide if Arigold Inc should buy the finials. b. Should Arigold Inc. buy the finials?

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Arigold Inc. has been manufacturing its own finials for its curtain rods. The company is currently o...

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