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8 Exercise 13-13 Outsourcing decision affected by opportunity costs LO 13-3 10 points Thornton Electronics currently produces the shipping containers it uses to deliver the
8 Exercise 13-13 Outsourcing decision affected by opportunity costs LO 13-3 10 points Thornton Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows: eBook Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 6,000 6,400 3,500 7,800 27,880 Hint One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Thornton for $2.80 each. Ask Required Print a. Calculate the total relevant cost. Should Thornton continue to make the containers? b. Thornton could lease the space it currently uses in the manufacturing process. If leasing would produce $11,500 per month, calculate the total avoidable costs. Should Thornton continue to make the containers? References a. Total relevant cost Should Thornton continue to make the containers? b. Total avoidable cost Should Thornton continue to make the containers
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