P11-36 (book/static) Question Help Riverside Clippers Corp manufactures garden tools in a factory in Taneytown, Maryland. Recently, the company designed a collection of tools for professional use rather than consumer use. Management needs to make a good dedsion about whether to produce this line in their existing space in Maryland, where space is available or to accept an offer from a manufacturer in Taiwan. Data concerning the decision are (Click the icon to view the data.) Read the requirements Requirement 1. Should Riverside Clippers Corp manufacture the 800,000 garden tools in the Maryland facility or purchase them from the supplier in Taiwan? Explain. The cost of manufacturing 800,000 garden tools in the Maryland facility is 4.200,000 and the cost of purchasing 800,000 garden tools from the Taiwan supplier is S 4,000,000 Riverside Clippers Corp sh purchase the garden tools from the Taiwan supplier because it is S less than the relevant costs to manufacture the garden tools in Maryland. Data Table Requirements Expected annual sales of garden tools (in units) Average selling price of tools Price quoted by Taiwanese company, in New Tawanese Dollars (NTD) Current exchange rate Variable manufacturing costs Incremental annual fixed manufacturing costs associated with the new product line Variable selling and distribution costs Annual fixed selling and distribution costsa Selling and distribution costs are the same regardless of whether the tools are manufactured in Maryland or imported. 800,000 $12 175 35 NTD-31 54.75 per unit S400,000 $1.00 per unit $220,000 1. Should Riverside Clippers Corp manufacture the 800,000 garden tools in the Maryland facility or purchase them from the supplier in Taiwan? Explain 2. Riverside Clippers Corp believes that the U.S. dollar may weaken in the coming months against the New Taiaese Dollar and does not want to face any currency risk. Assume that Riverside Clippers Corp can enter into a forward contract today to purchase 175 NTD for $5.35 Should Riverside Clippers Corp manufacture the 800,000 garden tools in the Maryland facility or purchase them from the Tawan supplier? Explain 3. What are some of the qualitative factors that Riverside Clippers Corp should consider when deciding whether to outsource the garden tools manufacturing to Taiwan? PrintDone PrintDone P11-36 (book/static) Question Help Riverside Clippers Corp manufactures garden tools in a factory in Taneytown, Maryland. Recently, the company designed a collection of tools for professional use rather than consumer use. Management needs to make a good dedsion about whether to produce this line in their existing space in Maryland, where space is available or to accept an offer from a manufacturer in Taiwan. Data concerning the decision are (Click the icon to view the data.) Read the requirements Requirement 1. Should Riverside Clippers Corp manufacture the 800,000 garden tools in the Maryland facility or purchase them from the supplier in Taiwan? Explain. The cost of manufacturing 800,000 garden tools in the Maryland facility is 4.200,000 and the cost of purchasing 800,000 garden tools from the Taiwan supplier is S 4,000,000 Riverside Clippers Corp sh purchase the garden tools from the Taiwan supplier because it is S less than the relevant costs to manufacture the garden tools in Maryland. Data Table Requirements Expected annual sales of garden tools (in units) Average selling price of tools Price quoted by Taiwanese company, in New Tawanese Dollars (NTD) Current exchange rate Variable manufacturing costs Incremental annual fixed manufacturing costs associated with the new product line Variable selling and distribution costs Annual fixed selling and distribution costsa Selling and distribution costs are the same regardless of whether the tools are manufactured in Maryland or imported. 800,000 $12 175 35 NTD-31 54.75 per unit S400,000 $1.00 per unit $220,000 1. Should Riverside Clippers Corp manufacture the 800,000 garden tools in the Maryland facility or purchase them from the supplier in Taiwan? Explain 2. Riverside Clippers Corp believes that the U.S. dollar may weaken in the coming months against the New Taiaese Dollar and does not want to face any currency risk. Assume that Riverside Clippers Corp can enter into a forward contract today to purchase 175 NTD for $5.35 Should Riverside Clippers Corp manufacture the 800,000 garden tools in the Maryland facility or purchase them from the Tawan supplier? Explain 3. What are some of the qualitative factors that Riverside Clippers Corp should consider when deciding whether to outsource the garden tools manufacturing to Taiwan? PrintDone PrintDone