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Outsourcing (Make-or-Buy) Decision Direct materials $8.00 Direct labor 1.50 Factory overhead 9.00 Total $18.50 These cost predictions include $60,000 in facility-level fixed factory overhead averaged
Outsourcing (Make-or-Buy) Decision Direct materials $8.00 Direct labor 1.50 Factory overhead 9.00 Total $18.50 These cost predictions include $60,000 in facility-level fixed factory overhead averaged over 10,000 units. auto air purifier by 50 percent. The electric motor's components will cost $2.00 if Mountain Air assembles the motors. - Calculate the net advantage (disadvantage) of outsourcing the electric motors from Mini Motor Company. - Use a negative sign with your answer to indicate a net disadvantage of outsourcing (if applicable). (b) If it could otherwise rent the motor-assembly space for $24,000 per year, should it make or outsource this component? - Calculate the net advantage (disadvantage) of outsourcing the motors, assuming the space could be rented. - Use a negative sign with your answer to indicate a net disadvantage of outsourcing (if applicable). $ (c) Management should consider which of the following nonquantitative factors in deciding whether to make or buy the motors. OThe quality of their own and the supplier's motors. OThe dependability of the supplier. Whether Mini Motor has a track record of meeting its commitments. All of these. Outsourcing (Make-or-Buy) Decision Direct materials $8.00 Direct labor 1.50 Factory overhead 9.00 Total $18.50 These cost predictions include $60,000 in facility-level fixed factory overhead averaged over 10,000 units. auto air purifier by 50 percent. The electric motor's components will cost $2.00 if Mountain Air assembles the motors. - Calculate the net advantage (disadvantage) of outsourcing the electric motors from Mini Motor Company. - Use a negative sign with your answer to indicate a net disadvantage of outsourcing (if applicable). (b) If it could otherwise rent the motor-assembly space for $24,000 per year, should it make or outsource this component? - Calculate the net advantage (disadvantage) of outsourcing the motors, assuming the space could be rented. - Use a negative sign with your answer to indicate a net disadvantage of outsourcing (if applicable). $ (c) Management should consider which of the following nonquantitative factors in deciding whether to make or buy the motors. OThe quality of their own and the supplier's motors. OThe dependability of the supplier. Whether Mini Motor has a track record of meeting its commitments. All of these
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