Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier. The relevant information is provided below: For

image text in transcribed

A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier. The relevant information is provided below: For in-house manufacturing: Annual fixed cost = $90,000 Variable cost per part = $170 For purchasing from supplier: Purchase price per part = $180 a. If demand is forecast to be 6,000 parts, should the firm make the part in-house or purchase it from a supplier? Round your answer to the nearest whole number. Break-Even Quantity: parts The best decision is to -Select- b. The marketing department forecasts that the upcoming year's demand will be 6,000 parts. A new supplier offers to make the parts for $178 each. Should the company accept the offer? Round your answer to the nearest whole number. New Break-Even Quantity: parts The best decision is to -Select- C. What is the maximum price per part the manufacturer should be willing to pay to the supplier if the forecast is 6,000 parts? Round your answer to the nearest cent. $

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

Horngrens Financial & Managerial Accounting

Authors: Tracie Miller Nobles, Brenda Mattison

7th Edition

0136516254, 9780136516255

More Books

Students also viewed these Accounting questions