Business, 14.11.2019 06:31 erikap0889
20-7 riggs company purchases sails and produces sailboats. it currently produces 1,200 sailboats per year, operating at normal capacity, which is about 80% of full capacity. riggs purchases sails at $250 each, but the company is considering using the excess capacity to manufacture the sails instead. the manufacturing cost per sail would be $100 for direct materials, $80 for direct labor, and $90 for overhead. the $90 overhead is based on $78,000 of annual fixed overhead that is allocated using normal capacity. the president of riggs has come to you for advice. "it would cost me $270 to make the sails," she says, "but only $250 to buy them. should i continue buying them, or have i missed something
Answers: 3
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20-7 riggs company purchases sails and produces sailboats. it currently produces 1,200 sailboats per...
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