Question
A ) -A machine has been identified as a bottleneck and the source of the constraint for a manufacturing company that has multiple products and
A) -A machine has been identified as a bottleneck and the source of the constraint for a manufacturing company that has multiple products and multiple machines. Discuss ways the company can overcome the bottleneck.
B)- Mother Hubbard Company purchases 8,000 units of a part that it needs for production of its product.Notification has just been received from the supplier that a price increase will take effect shortly, which will bring the price of each part to $25.Mother Hubbard Company is considering using some idle facilities to produce the part.The production costs to produce the needed 8,000 parts are as follows:
Direct materials$17,500
Direct labor30,000
Variable factory overhead14,000
Fixed factory overhead33,500
The idle facilities could also be rented out at an annual rent of $99,000.All the factory overhead costs are avoidable.
Required:
Determine if Mother Hubbard Company should continue to buy the part or produce it in-house.
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