Case 10 - Word Picture Tools galdo gaspar GG a File Home Insert Draw Mailings Review View Help Picture Format 9 Tell me what you want to do Share . Design Layout References Calibri (Bady) - 11 A A A Aav BI U nha x, x 4N ay A .EE 14 21 14 X Cut e Copy Format Painter Clipboard AaBbCcDc AaBbCcDc AaBbcc Aabbcc AaB Normal No Spac... Heading 1 Heading 2 Title Find ab Replace Select Paste Font Paragraph Styles Editing Case 15 OUTSOURCING (20 pts) Mocent Steels Corporation manufactures steel buildings for agricultural and commercial applications Ciurently, it is trying to decide between two alternatives regarding a major overhead door assembly for the company's buildings. The alternatives are as follows Option 1: Purchase new equipment with a five-year life and no salvage value at a cost of P5,000,000. Modem Steels uses straight line depreciation and allocates that allout ca per unit of production basis Option 2: Purchase the assemblies from an outside supplier who will sell them for P240 each under a five- year contract Following is Modern Steels Corp's present cost to produce one door assembly based on current and Omal activity of 50.000 mils per year: P 139 66 Dired Materials Direct labor Variable overtread Fixed overbead Total 36 (which include P7 supervision cost and 120 general overhead) P 284 The new equipment would be more efficient than the old equipment and would reduce direct labor costs and variable overhead costs by 25%. Supervisory costs of 13 50.000 would be unaffected. The new equipment would have a capacity of 75.000 assemblies per year. Modern Steels could lease the space occupied by current assembly production to another firm for P114,000 per ycar if the company decides to buy from the outside vendor REQUIRED: a) Show an analysis, including relevant unit and total costs. for each alternative of producing or berying the assemblies. Assume 30,000 assemblies are needed cach year. b) How would your answer differ if 60,000 assemblies were needed? c) In acklition to quantitative factors, what qualitative factors should be considered? Page 9 of 15 O words ng Fnglish (United Kingdom) + 90% W ENG UK O 9:18 PM 10/31/2021 Case 10 - Word Picture Tools galdo gaspar GG a File Home Insert Draw Mailings Review View Help Picture Format 9 Tell me what you want to do Share . Design Layout References Calibri (Bady) - 11 A A A Aav BI U nha x, x 4N ay A .EE 14 21 14 X Cut e Copy Format Painter Clipboard AaBbCcDc AaBbCcDc AaBbcc Aabbcc AaB Normal No Spac... Heading 1 Heading 2 Title Find ab Replace Select Paste Font Paragraph Styles Editing Case 15 OUTSOURCING (20 pts) Mocent Steels Corporation manufactures steel buildings for agricultural and commercial applications Ciurently, it is trying to decide between two alternatives regarding a major overhead door assembly for the company's buildings. The alternatives are as follows Option 1: Purchase new equipment with a five-year life and no salvage value at a cost of P5,000,000. Modem Steels uses straight line depreciation and allocates that allout ca per unit of production basis Option 2: Purchase the assemblies from an outside supplier who will sell them for P240 each under a five- year contract Following is Modern Steels Corp's present cost to produce one door assembly based on current and Omal activity of 50.000 mils per year: P 139 66 Dired Materials Direct labor Variable overtread Fixed overbead Total 36 (which include P7 supervision cost and 120 general overhead) P 284 The new equipment would be more efficient than the old equipment and would reduce direct labor costs and variable overhead costs by 25%. Supervisory costs of 13 50.000 would be unaffected. The new equipment would have a capacity of 75.000 assemblies per year. Modern Steels could lease the space occupied by current assembly production to another firm for P114,000 per ycar if the company decides to buy from the outside vendor REQUIRED: a) Show an analysis, including relevant unit and total costs. for each alternative of producing or berying the assemblies. Assume 30,000 assemblies are needed cach year. b) How would your answer differ if 60,000 assemblies were needed? c) In acklition to quantitative factors, what qualitative factors should be considered? Page 9 of 15 O words ng Fnglish (United Kingdom) + 90% W ENG UK O 9:18 PM 10/31/2021