Business, 07.04.2020 15:53 sierramarco247

Paper Moon, a manufacturer of outdoor lighting fixtures is operating at less than full capacity. The plant manager is considering making the mounting brackets now being purchased from a supplier at $7.50 each. Paper Moon already has the equipment to produce the brackets. The plant manager has analyzed the cost of producing the brackets and determined that each bracket will require $1.80 of direct material, $0.80 of direct labor, and $8.00 of manufacturing overhead. Seventy-five percent of the manufacturing overhead is a fixed cost that would not be affected by the decision to manufacture the brackets. Should Paper Moon continue to purchase the brackets or produce them internally?

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Paper Moon, a manufacturer of outdoor lighting fixtures is operating at less than full capacity. The...

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