Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Chapter 10, Problem 14PB
Daisy Hernandez sells girls christening dresses through the online store, Etsy. Her customers have asked if she has necklaces that could be included with the dress. Daisy found white glossy ceramic hearts from another Etsy vendor for $20. Daisy has the talent and already has a fully depreciated kiln to make these hearts.
A.Using the provided quantitative cost data to make the heart, should Daisy buy from her fellow Etsy vendor or make it herself?
B. What qualitative factors would be included in your decision.
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Sara makes wedding cakes from her home. A customer has requested two duplicate wedding cakes: one for the wedding and one to be frozen for their anniversary. The couple has offered $400 for both cakes instead of $500 ($250 each). The cost information to make one cake is shown in the image.
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The following is an excerpt from a conversation between Mark Loomis and Krista Huff. Mark is debating whether to buy a stereo system from Tru-Sound Systems, a locally owned electronics store, or Wholesale Stereo, an online electronics company.Mark: Krista, I don’t know what to do about buying my new stereo.Krista: What’s the problem?Mark: Well, I can buy it locally at Tru-Sound Systems for $1,175.00. However, Wholesale Stereo has the same system listed for $1,200.00.Krista: What’s the big deal? Buy it from Tru-Sound Systems.Mark: It’s not quite that simple. Wholesale Stereo charges $49.99 for shipping and handling. If I have Wholesale Stereo send it next-day air, it’ll cost $89.99 for shipping and handling.Krista: So?Mark: But, that’s not all. Tru-Sound Systems will give an additional 2% discount if I pay cash. Otherwise, they will let me use my VISA, or I can pay it off in three monthly installments. In addition, if I buy it from Tru-SoundSystems, I have to pay 9% sales tax. I won’t…
Chapter 10 Solutions
Principles of Accounting Volume 2
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