Question
If Platon has no alternative uses for the manufacturing capacity, what would be the profit impact ofbuying the subcomponents from the supplier?b. If Platon has
If Platon has no alternative uses for the manufacturing capacity, what would be the profit impact ofbuying the subcomponents from the supplier?b. If Platon has no alternative uses for the manufacturing capacity, what would be the maximum price perunit they would be willing to pay the supplier?c. Now assume Platon would avoid $150,000 in equipment leases and salaries if the subcomponent werepurchased from the supplier. Now what would be the profit impact of buying from the supplier?
Platon currently manufactures a subcomponent that is used in its main product. A supplier has offered tosupply all the subcomponents needed at a price of $42. Platon currently produces 100,000 subcomponentsat the following manufacturing costs:
Dm $15
DL $9
Variable Manu. Overhead $10
Fixed OH $15
Unit Cost =$49
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