Basketweaving studio

by | Jul 27, 2021 | Homework Help

Stacy McGuire recently opened her own basketweaving studio. She sells finished baskets in addition to the raw materials needed by customers to weave baskets of their own. Stacy has put together a variety of raw material kits, each including materials at various stages of completion.

Unfortunately, owing to space limitations, Stacy is unable to carry all varieties of kits originally assembled and must choose between two basic packages. The basic introductory kit includes undyed, uncut reeds (with dye included) for weaving one basket. This basic package costs Stacy $11.40 and sells for $27.82. The second kit, called Stage 2, includes cut reeds that have already been dyed. With this kit the customer need only soak the reeds and weave the basket.

Stacy is able to produce the second kit by using the basic materials included in the first kit and adding one hour of her own time, which she values at $18.20 per hour. Because she is more efficient at cutting and dying reeds than her average customer, Stacy is able to make two kits of the dyed reeds, in one hour, from one kit of undyed reeds. The kit of dyed and cut reeds sells for $33.00 Complete the incremental analysis below to determine whether Stacy’s basketweaving shop should carry the basic introductory kit with undyed and uncut reeds, or the Stage 2 kit with reeds already dyed and cut. (Round all answers to 2 decimal places, e.g. 5.25.

If an amount is blank enter 0, all boxes must be filled to be correct. If the impact on net income is a decrease use either a negative sign preceding the amount, e.g. -45 or parenthesis, e.g. (45). Enter all other amounts amounts as positive and subtract where necessary.)Sell(Basic Kit) Process Further Net Inc Sales Per Unit:Costs Per Unit:Direct Materials:Direct Labor:Total:Net Income Per Unit:

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