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HELP WITH alllALLL PARTS PLZ of component on each yoar. The cost per unt of this component is as folows: Requiredt Which aternative is tettery
HELP WITH alllALLL PARTS PLZ
of component on each yoar. The cost per unt of this component is as folows: Requiredt Which aternative is tettery ateractive Akernatively, th the percentage ol avodacke fies costs decresen, the "make" opogn eventualy is the comwenent Arches Manufacturing had always made its components in-house. However, Canyonlands Component Works had recently offered to supply one component, of component DA each year, The cost per unit of this component is as follows: Assume that 80% of Arches Manufacturing's fixed overhead for component DA would be eliminated if that component were no longer produced. Required: 1. Conceptual Connection: If Wrches decides to purchase the component from Canyonlands, by how much will operating income increase or decrease (as comp Which alternative is better? 2. Conceptual Connection: Briefly explain how increasing or decreasing the 80% figure affects Arches's final decision to make or purchase the component. (compared to the "make" option) than it was when the percentage was 80%. In other words, as the percentage increases, difference between the "purchase" an "purchase" decision being even attractive. Alternatively, as the percentage of avoidable fixed costs decreases, the "make" option eventuan appealing financially as the "purchase* option. Finally, as the percentage of avoidable fixed cost decreases low enough and the total releva option becomes the more financially appealing option 3. Conceptual Connection: By what dollar amount would the per-unit relevant fixed cost have to decrease before Arches would be indifferent (L.e., incur the same the component? Yonlands Component Works had recently offered to supply one component, DA, at a price of $51 each. Arches uses 12,500 units vould be eliminated if that component were no longer produced. Canyonlands, by how much will operating income increase or decrease (as compared to making the component in-house)? \% figure affects Arches's final decision to make or purchase the component. costs of making the component increase, causing the "purchase" decision to be financially appealing other words, as the percentage increases, difference between the "purchase" and "make" options increases resulting in the as the percentage of avoidable fixed costs decreases, the "make" option eventually is costly and s the percentage of avoldable fixed cost decreases low enough and the total relevant costs of making the component decrease, the fixed cost have to decrease before Arches would be indifferent (i.e., incur the same cost) between "making" versus "purchasing" of component oA esch yese. The cont per unit of this component is as follows: Ausume thet Eow of Arches Manufacturing's fised overhesd for component DA woud be elminated if that component were no longer produced. Required: Which ekermative is better? "purchase" decision being even concy and opten becents the more finanoaly appeding option the cantotnent of component on each yoar. The cost per unt of this component is as folows: Requiredt Which aternative is tettery ateractive Akernatively, th the percentage ol avodacke fies costs decresen, the "make" opogn eventualy is the comwenent Arches Manufacturing had always made its components in-house. However, Canyonlands Component Works had recently offered to supply one component, of component DA each year, The cost per unit of this component is as follows: Assume that 80% of Arches Manufacturing's fixed overhead for component DA would be eliminated if that component were no longer produced. Required: 1. Conceptual Connection: If Wrches decides to purchase the component from Canyonlands, by how much will operating income increase or decrease (as comp Which alternative is better? 2. Conceptual Connection: Briefly explain how increasing or decreasing the 80% figure affects Arches's final decision to make or purchase the component. (compared to the "make" option) than it was when the percentage was 80%. In other words, as the percentage increases, difference between the "purchase" an "purchase" decision being even attractive. Alternatively, as the percentage of avoidable fixed costs decreases, the "make" option eventuan appealing financially as the "purchase* option. Finally, as the percentage of avoidable fixed cost decreases low enough and the total releva option becomes the more financially appealing option 3. Conceptual Connection: By what dollar amount would the per-unit relevant fixed cost have to decrease before Arches would be indifferent (L.e., incur the same the component? Yonlands Component Works had recently offered to supply one component, DA, at a price of $51 each. Arches uses 12,500 units vould be eliminated if that component were no longer produced. Canyonlands, by how much will operating income increase or decrease (as compared to making the component in-house)? \% figure affects Arches's final decision to make or purchase the component. costs of making the component increase, causing the "purchase" decision to be financially appealing other words, as the percentage increases, difference between the "purchase" and "make" options increases resulting in the as the percentage of avoidable fixed costs decreases, the "make" option eventually is costly and s the percentage of avoldable fixed cost decreases low enough and the total relevant costs of making the component decrease, the fixed cost have to decrease before Arches would be indifferent (i.e., incur the same cost) between "making" versus "purchasing" of component oA esch yese. The cont per unit of this component is as follows: Ausume thet Eow of Arches Manufacturing's fised overhesd for component DA woud be elminated if that component were no longer produced. Required: Which ekermative is better? "purchase" decision being even concy and opten becents the more finanoaly appeding option the cantotnent Step by Step Solution
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