Accounting homework problem


Part IV
Seymour Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Seymour produces a relatively small amount (14,000 units) of the cream and is considering the purchase of the product from an outside supplier for $5.70 each. If Seymour purchases from the outside supplier, it would continue to sell and distribute the cream under its own brand name. Seymour’s accountant constructed the following profitability analysis.




  Revenue (14,000 units × $14.0)




     Unit-level materials costs (14,000 units × $1.70)




     Unit-level labor costs (14,000 units × $.60)




     Unit-level overhead costs (14,000 × $.40)




     Unit-level selling expenses (14,000 × $.20)





  Contribution margin




     Skin cream production supervisor’s salary




     Allocated portion of facility-level costs




     Product-level advertising cost





  Contribution to companywide income









Calculate the total avoidable costs. 



Calculate the total avoidable cost per unit. 



Should Seymour continue to make the product or buy it from the supplier?





Suppose that Seymour is able to increase sales by 10,000 units (sales will increase to 24,000 units). Calculate the total avoidable costs. 


At this level of production, should Seymour make or buy the cream?




15% off for this assignment.

Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!

Why US?

100% Confidentiality

Information about customers is confidential and never disclosed to third parties.

Timely Delivery

No missed deadlines – 97% of assignments are completed in time.

Original Writing

We complete all papers from scratch. You can get a plagiarism report.

Money Back

If you are convinced that our writer has not followed your requirements, feel free to ask for a refund.

WeCreativez WhatsApp Support
Our customer support team is here to answer your questions. Ask us anything!
👋 Hi, how can I help?