Question
1. BETA company produces devices. The company also produces other equipment / spare parts, has produced 32,000 such to be used in the appliances it
1. BETA company produces devices. The company also produces other equipment / spare parts, has produced 32,000 such to be used in the appliances it will produce. Data on their cost to our company are presented as follows: Cost per device Total cost Variable production cost $ 23 $ 736,000 Fixed production cost $ 65 $ 2,080,000 Another company which produces the same equipment / spare parts as our company has provided BETA company with all the necessary quantity at a price of $ 72 per device. If BETA accepts the offer, 70% of the above fixed cost can be totally eliminated. Based on the above information, we assume that if she did not produce them herself, but would buy them, she would be able to use the product line which would be cheap for another product, which would provide $ 240,000 to annual income. Would BETA be better off financially if it continued to produce spare parts or buy them in this case? What would be the maximum price you would agree to buy? Explain the answer Remaining revenue is the additional amount remaining after completing the cost and expense required. Incomes the excess income earned over the desired income
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