6-1 MyAccountingLab Homework: Chapter 11 Question 9, P11-36 (similar to) Part 1 of 4 HW Score: 40.57%, 18.26 of 45 points O Points: 0 of 5 Save Yard Growers Corp manufactures garden tools in a factory in Taneytown, Maryland Recently, the company designed a collection of tools for professional use rather than consumer use Management needs to mak a good decision about whether to produce this line in their existing space in Maryland, where space is available or to accept an offer from a manufacturer in Taiwan Data concerning the decision are as follows (Click the icon to view the data) Read the remond Requirement 1. Should Yard Growers Corp manufacture the 670,000 garden tools in the Maryland facility or purchase them from the supplier in Taiwan? Explain The cost of manufacturing 670,000 garden tools in the Maryland facility is 670.000 garden tools from the Taiwan supplier is and the cost of purchasing Data table Expected annual sales of tools (in units) Average selling price of tools Price quoted by Taiwanese company, in New Taiwanese Dollars (NTD) 670,000 8 24,000 Current exchange rate Variable manufacturing costs Variable selling and distribution costs Incremental annual fixed manufacturing costs associated with the new product line Annual fixed selling and distribution costs 10,000 NTD=$1 $2.90 per unit 350,000 $0.70 per unit $ 315,000 Selling and distribution costs are the same regardless of whether the tools are manufactured in Maryland or imported. - X Requirements 1. 2. 3. Should Yard Growers Corp manufacture the 670,000 garden tools in the Maryland facility or purchase them from the supplier in Taiwan? Explain. Yard Growers Corp believes that the U.S. dollar may weaken in the coming months against the New Taiwanese Dollar and does not want to face any currency risk. Assume that Yard Growers Corp can enter into a forward contract today to purchase 24,000 NTD for $5.10. Should Yard Growers Corp manufacture the 670,000 garden tools in the Maryland facility or purchase them from the Taiwan supplier? Explain. What are some of the qualitative factors that Yard Growers Corp should consider when deciding whether to outsource the garden tools manufacturing to Taiwan? - X