Pixie Pharmaceuticals is a research-based company which manufactures a wide variety of drugs for use...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Pixie Pharmaceuticals is a research-based company which manufactures a wide variety of drugs for use in hospitals. The purchasing manager has recently been approached by a new manufacturer based in a newly industrialized country who has offered to produce three of the drugs at their factory. The following cost and price information has been provided.
Drug
Fairyoxide
Spriteolite
Goblins
Production
20,000
40,000
80,000
$
$
$
Direct material cost, per unit
0.80
1.00
0.40
Direct labour cost, per unit
1.6
1.80
0.80
Direct expense cost, per unit
0.40
0.60
0.20
Fixed cost per unit
0.80
1.00
0.40
Selling price each
4.00
5.00
2.00
Imported price
2.75
4.20
2.00
Instructions:
What profit will the company make by producing all the drugs itself?
What saving/ (increased cost) per unit would be made/(incurred) if Fairyoxide was purchased from the overseas producer (to two decimal places)?
What saving/ (increased cost) would be made/(incurred) per unit if Spriteolite was purchased from the overseas producer?
What saving/ (increased cost) would be made/(incurred) if Goblinex was purchased from the overseas producer?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
