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if any point is wrong get ready for 5 down vote 11.5 Make or Buy-Time Limitation M17 A Company manufactures three components. A, B and
if any point is wrong get ready for 5 down vote
11.5 Make or Buy-Time Limitation M17 A Company manufactures three components. A, B and C. These components pass through Machines P and Q. The Machine Hour capacity of Q is limited to 7,800 hours a month. The Company is interested in fulfilling the market demand to retain its market share. The following information is given: Components A B C. Demand (units / month) 1,200 1,200 1,500 Variable Cost per unit *215 * 111 187 55 Fixed Cost (at normal capacity utilization) 115 115 1/2 Hours Per unit: 2 2 3 3 1 Q Component B has to be made by the Company. There is a Supplier available for Components A and C at * 280 and * 161 per unit respectively. 1. Which Component(s) and in what quantities should be purchased to minimize costs? 2. From a financial perspective, what do you need to ensure in order to justify your answer in (1) aboveStep by Step Solution
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