Question

(b) Reliant Enterprises
sailboat
manufacturer, is currently operating at
70 percent capacity and producing
about 10000 units a year. In order to
use more capacity, the manager has
been considering the research and
development department's suggestions
that Reliant Enterprises manufacture
its own sails
Currently Reliant purchases sails from
a supplier at unit
pnee of 28.
Estimates show that the firm
manufacture its own sails at < 10 per
unit direct materials cost and 28 direct
labour cost. The factor overhead is 22
per direct labour cost of which 20
percent is variable.​

Answer 1

Answer:

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