Question
Path: p PTB Cabinets is a company located in Abbotsford, BC that makes kitchen and bathroom cabinets for higher end homes. They fully manufacture
Path: p PTB Cabinets is a company located in Abbotsford, BC that makes kitchen and bathroom cabinets for higher end homes. They fully manufacture all aspects of their product, from wood purchased from local sawmills. The company has received an offer from Old World Hardware to make the hinges for their cabinets. Currently PTB has a total cost of $20,000 on hinge manufacturing (20,000 units). $5,000 of that is allocated for the part of the building space the department occupies. $2,000 is a variable fixed cost related to supervision of staff, janitorial, and utilities. $13,000 is direct labour and materials. Old World Cabinets has offered to supply the hinges for $14,000 Identify the Relevant costs for this decision and determine what the decision should, adding any qualitative considerations you see. Paragraph BI I
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