Please explain thank you
MinTek manufactures private-lebel small electronic products, such as alarm clocks, calculators, kitchen timers, st sold as sets, and others are sold individualily. Products are studied as to their then production begins. The company has generally had very successful product introductions. Only two products introduced by the company have been discontinued sales potential, and then cost estimates are made. The E One of the products currently sold is a multi-alarm clock. The clock has four alarms that can be programmed to sound at various times and for varying lengths of time. The company has experienced a great deal of difficulity in making the cireuit boards for th of they caused an electric shock when the alarms were being shut off. The Engineering Department is attempting to revise the manufacturing process, but the revision will take another 6 morths at least The clocks were very popular when they were introduced, and since they are private-label, the company has not suffered much from the recalls. Presently, the company has a very ladge order for several items from Kmart Stores. The order includes 4,800 of the multi-slarm clocks. When the company suggested that Kmart purchase the clocks from anothe manufacturer, Kmart threatened to rescind the entire order unless the clocks were included The company has therefore investigated the possibility of having another company make the clocks for them. The clocks were bid for the Kmart order based on an estimated $7.04 cost Circuit board, 1 each $1.40 $1.40 Plastic case, 1 each O $0.600.60 Alarms, 4$0.11 each Labor, 15 minutes$16/hour 4.00 Overhead, $2.40 per labor hour 0.60 0.44 from Trans-Tech Asis, a Korean manufacturer with a very good quality record. Trans-Tech has offered to reduce the price MiniTek could purchase clocks to fill the Kmart order for $12.00 to $9.50 after MiniTek has a customer for 6 months, placing an order of at least 1,000 units per month. If MiniTek becomes a "preferred customer by year, the price would be reduced still further to $5.50 or MiniTek. They have offered to sell 4,800 clocks for $6.00 esch Honever, Omega Products has been in charges soon. The has also offered to make clocks f engineer, however, and the quality of the clocks is likely to be good. version 4.24 12 ircuit board, 1 each $1.40 $1.40 Plastic case, 1 each o $0.60 0.60 Alarms, 4 0.11 each Labor, 15 minutes o $16/hour 4.00 Overhead, $2.40 per labor hour 0.60 0.44 clocks to fil the Kmert order for 12.00 from Trans-Tech Asia, a Korean manufacturer with a very good quality record. Trans-Tech has offered to reduce the to $9.50 after MiniTek has been a customer for 6 months, placing an order of at least 1,000 units per month. If Min/Tek a "preferred customer" by purchasing 19,000 units per year, the price would be reduced still further to $5.50 Omega Products, a local manufacturer, has also offered to make clocks for MiniTek. They have offered to sell 4,800 clocks for $6.00 each. However business for only 6 months. They have experienced significant turnover in their labor force, and the local press has reported that the owners may face tax evasion charges soon. The They have offered to sell 4,800 clocks for $6.00 each. However, Omega Products has been in owner of Omega Products is an electronic engineer, however, and the quality of the clocks is likely to be good. If MiniTek decides to purchase the clocks from eilther Trans-Tech or Omega, all the costs to manufacture could be avoided, except a total of $1,200 in depreciation. The machinery is feirly new, and has no aiternate use. (a1) Calculate profit under each of the alternatives if the clocks are to be sold for $18.00 each to Kmart? Make Buy-Trans-Tech Buy-Omega Profit
