Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Outsourcing Guillory company produces a part that has the following cost per unit: Homeland corporation can provides the part to Guillory for $ 23 per
Outsourcing Guillory company produces a part that has the following cost per unit: Homeland corporation can provides the part to Guillory for $ 23 per unit. Guillory co has determined that 50% of its fixed overhead would continue if it purchased the part. However, if Guillory no longer produces the part, it can rent that portion of the plant facilities for $ 70,000 per year. Guillory co. currently produces 12,000 parts per year. Set up your information and show which alternative is preferrable and by what margin. Once you've done your "make or buy" calculations, you should be able to choose one of the following answers: a) Make the part because they would make $ 24,000 more if they made the part. B) Make the part because they would make $40,000 more. C) Buy the part because they would make $10,000 more if they bought the part. D) buy the part because they would make $ 46,000 more
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started