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Bid: 8,000 units $7.50 each Cost of production Direct materials 3 Direct labor Variable MO Fixed MO Total cost per unit $ 8 Compute the
Bid: 8,000 units $7.50 each Cost of production Direct materials 3 Direct labor Variable MO Fixed MO Total cost per unit $ 8 Compute the difference in cost between making and buying the umbrella tote bag. Based strictly on the incremental analysis, should Mohave buy the tote bags or continue to make them? New product line generates $10,000 in annual profits. Recompute the difference in cost between making and buying the umbrella tote bag Does this change your recommendation to Mohave? If so, how? Assume Mohave has a sustainability goal to increase the percentage of spending from local suppliers. If Mohave's managers are responsible for improving this metric, how might it impact their sourcing decisions? What other strategic or sustainability-related goals should Mohave consider before making a final decision? Bid: 8,000 units $7.50 each Cost of production Direct materials 3 Direct labor Variable MO Fixed MO Total cost per unit $ 8 Compute the difference in cost between making and buying the umbrella tote bag. Based strictly on the incremental analysis, should Mohave buy the tote bags or continue to make them? New product line generates $10,000 in annual profits. Recompute the difference in cost between making and buying the umbrella tote bag Does this change your recommendation to Mohave? If so, how? Assume Mohave has a sustainability goal to increase the percentage of spending from local suppliers. If Mohave's managers are responsible for improving this metric, how might it impact their sourcing decisions? What other strategic or sustainability-related goals should Mohave consider before making a final decision
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