Solutions Guide: Please do not present as your own. I sometimes post solutions that are totally mine, from the book’s solutions manual, or a mix of my work and the books solutions manual. But this is only meant as a solutions guide for you to answer the problem on your own. I recommend doing this with any content you buy online whether from me or from someone else.

CASE 13–30 Make or Buy; Utilization of a Constrained Resource [LO1, LO3, LO5] Garrison, Noreen & Brewer. 13th edition Managerial Accounting. Entire case.TufStuff, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of the company’s …show more content…

2. Students may have answered this question assuming that direct labor is a variable cost, even though the case strongly hints that direct labor is a fixed cost. The solution is shown here assuming that direct labor is fixed. The solution assuming that direct labor is variable will be shown in part (4).

| |Solution assuming direct labor is fixed |
| | | |Manufactured |
| | |Purchased WVD Drums |WVD Drums |Bike Frames |
| |Selling price |$149.00 |$149.00 |$239.00 |
| |Variable costs: | | | |
| |Direct materials |138.00 |52.10 |99.40 |
| |Variable manufacturing overhead |0.00 |1.35 |1.90 |
| |Variable selling and administrative | 0.75 |