Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An Electronics company is trying to reduce supply chain risk by making more responsible make-buy decisions through improved cost estimation. A high-use component (expected usage

An Electronics company is trying to reduce supply chain risk by making more responsible make-buy decisions through improved cost estimation. A high-use component (expected usage is 5000 units per year) can be purchased for $25 per unit with delivery promised within a week. Alternatively, Samsung can make the component in-house and have it readily available at a cost of $5 per unit, if equipment costing $150,000 is purchased. Labor and other operating costs are estimated to be $35,000 per year over the study period of 5 years. Salvage is estimated at 10% of first cost and i =12% per year. Neglect the element of availability (a) to determine the breakeven quantity and (b) to recommend making or buying at the expected usage level.

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

Step: 3

blur-text-image

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

Auditing And Assurance Services

Authors: Timothy Louwers, Penelope Bagley, Allen Blay, Jerry Strawser, Jay Thibodeau

9th International Edition

1266285997, 978-1266285998

More Books

Students also viewed these Accounting questions

Question

Management rewarded me for correcting problems. 1 2 3 4 5 LO.1

Answered: 1 week ago

Question

How does or how might the key public affect your organization?

Answered: 1 week ago