Discover the answers you need at Westonci.ca, where experts provide clear and concise information on various topics. Discover detailed solutions to your questions from a wide network of experts on our comprehensive Q&A platform. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform.
Sagot :
To determine whether Almost Summer Break (ASB) should make their own components or purchase them from a third party, we need to calculate the total per unit cost of making the component. Here are the costs provided:
- Direct materials: $1.50
- Direct labor: $8.75
- Variable overhead: $2.80
- Fixed overhead: $3.50
Adding these costs together gives us the total per unit cost to make the component:
\[ \text{Total per unit cost} = \$1.50 + \$8.75 + \$2.80 + \$3.50 \]
Let's calculate this:
\[ \text{Total per unit cost} = \$16.55 \]
Therefore, the total per unit cost for ASB to make the component is $16.55.
ASB should compare this cost with the price quoted by the third party to determine the more economical option. If the third-party cost is less than $16.55 per unit, it would be cheaper to purchase the component. If it is more, then ASB should consider making the component in-house. Additionally, ASB should consider other factors such as quality, reliability, and any potential strategic advantages or disadvantages in making or buying the component.
- Direct materials: $1.50
- Direct labor: $8.75
- Variable overhead: $2.80
- Fixed overhead: $3.50
Adding these costs together gives us the total per unit cost to make the component:
\[ \text{Total per unit cost} = \$1.50 + \$8.75 + \$2.80 + \$3.50 \]
Let's calculate this:
\[ \text{Total per unit cost} = \$16.55 \]
Therefore, the total per unit cost for ASB to make the component is $16.55.
ASB should compare this cost with the price quoted by the third party to determine the more economical option. If the third-party cost is less than $16.55 per unit, it would be cheaper to purchase the component. If it is more, then ASB should consider making the component in-house. Additionally, ASB should consider other factors such as quality, reliability, and any potential strategic advantages or disadvantages in making or buying the component.
Thank you for visiting our platform. We hope you found the answers you were looking for. Come back anytime you need more information. We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.
