Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A laptop manufacturer wants to compare the total cost of assembling its laptops in the United States versus Taiwan. All of the laptops will be

A laptop manufacturer wants to compare the total cost of assembling its laptops in the United States versus Taiwan. All of the laptops will be sold in the United States. To evaluate inventory, it uses a safety factor of 2.25. The holding cost per laptop is $3.5 per week in the United States and $3.0 per week in Taiwan. The lead time with U.S. production is 2 week, whereas it is 8 weeks with production in Taiwan. In addition, it costs $2.25 to ship laptops to the United States from Taiwan. Weekly demand is 900 laptops, with a standard deviation of 700. a. What is the per unit holding cost of a laptop with U.S. production? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Holding cost $ 21.23 per unit b. What is the per unit holding cost of a laptop with production in Taiwan? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Holding cost per unit c. A laptop requires 50 minutes of labor to assemble in the United States or in Taiwan. The total cost of labor in the United States is $35 per hour, while in Taiwan it is $8. What is the change in cost per laptop if it switches production to Taiwan? Note: Round intermediate calculations to 2 decimal places. Round your answer to 2 decimal places. Change in cost per unit

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

Cima Official Exam Practice Kit Financial Operations

Authors: Jo Watkins

5th Edition

1856177335, 978-1856177337

More Books

Students also viewed these Accounting questions