Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Assuming none of a plants machines are able to be utilized to produce other parts during this period and must sit idle: You are a
Assuming none of a plants machines are able to be utilized to produce other parts during this period and must sit idle: You are a quoted a purchase price of $10.75 per unit with a $1 per unit discount for orders exceeding 10000 units. The same part made in-house has a flat rate cost of $12.00/unit The cost breakdown for in-house production is as follows: Unit Mat'l Cost = $3.00 Direct Labor Cost = $2.50 Labor Overhead at 150% = $3.75 Equipment fixed cost sits at = $2.75 TOTAL = $12.00/unit You are needing 15000 units total 1. Should the units be made in-house or bought from the vendor? Show your math to support your choice. 2. What is the overall $$ value of the entire 15000 units? (In-house and purchased from vendor) 3. Assume there is no unit discount associated with a certain number of minimum units purchased. How does this change the answer? 4. The raw material cost for in-house production rises to $4.50/unit, does this change the outcome? 5. Lastly, new equipment has been purchased for your plant. Efficiency and production in your plant improves by 25%. What aspects would this change and how
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started