Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

[3] The AGGie Industrial Entrepreneurs (AGGIE) manufacture customized business card holders (BCHS) using their several lines of additive manufacturing machines (aka 3-D printers). The

image text in transcribed

[3] The AGGie Industrial Entrepreneurs (AGGIE) manufacture customized business card holders (BCHS) using their several lines of additive manufacturing machines (aka 3-D printers). The IISE student chapter has offered to produce the BCHS at a unit price of $24/BCH as long as the order is for at least 500 units. The lead ISEN for AGGIE has estimated the expected demand to be 1000 BCH units each year over the next 5 years. If AGGIE decides to manufacture the BCHS themselves they will investment in a new 3-D printer that will cost $5,800 and will have a salvage value of $500 after 5 years. Unit production cost is estimated in the table below. The AGGIE firm CFO has identified a MARR of 12% for assessing economic investment decisions. Find the following: Direct material Direct labor $3.50 $10.00 Variable factory overhead $3.80 Fixed factory overhead $4.20 Total unit cost $21.50 (a) Draw the cash flow diagram for the make option (b) Calculate AEC (12%) for the AGGIE make option (c) Calculate the unit cost for the AGGIE make option (d) Should AGGIE make or buy?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng

12th edition

1305084853, 978-1305464803, 130546480X, 978-1305799448, 978-1305084858

More Books

Students also viewed these Accounting questions