Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help wih question no 4 Use this information for the next four questions: Puffin Company currently purchases a component part for $13 but

I need help wih question no 4

Use this information for the next four questions:

Puffin Company currently purchases a component part for $13 but is considering making the part internally. It is considering two alternatives for making it internally. Alternative A would increase fixed costs by $12,000 per month and incur variable costs of $9 per component part. Alternative B would increase fixed costs by $20,000 per month and incur variable costs of $7 per component part. Puffin Company is unsure of demand.

Q. 4 So far, we have evaluated the decision in terms of demand risk. Assume that Puffin Company is leaning towards outsourcing and has received a bid from a new supplier to provide the component part for $12 (i.e., $1 less than the current supplier). Provide three additional factorsthat Puffin Company would want to consider before finalizing their decision even if these factors are difficult to quantify

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

Sawyers Internal Auditing Enhancing And Protecting Organizational Value

Authors: The Internal Audit Foundation

7th Edition

1634540522, 9781634540520

More Books

Students also viewed these Accounting questions

Question

Develop successful mentoring programs. page 400

Answered: 1 week ago