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Please help, in the second picture both questions are needed, thank you!!! B Part One--Determine the Amount of Capital That Can be Freed by
Please help, in the second picture both questions are needed, thank you!!! B " Part One--Determine the Amount of Capital That Can be Freed by Outsourcing Production Solaris, Inc. manufactures lighting units for the home market. The company is currently looking to expand its product line but lacks the available capital to do so. Solaris' management believes that it can free up capital by outsourcing production of Part #77c (an internal power conditioner) overseas. This particular part is currently manufactured internally at the same facility as several of Solaris, Inc.'s other parts and the vast majority of fixed costs related to its production are, therefore, unavoidable. Information pertaining to the quantity of 77c's needed as well as the outsourcing, variable, and 2 avoidable fixed costs of this part are as follows: 3 Quantity of Part 77c Needed for Production 100,000 4 Unit Purchase Cost if Outsourced 6.00 5 Direct Materials per Unit 3.50 6 Direct Labor per Unit 2.75 7 Variable Overhead per Unit 2.25 8 Avoidable Fixed Manufacturing Costs 50,000 $ production of Prepare a differential analysis in order to find the costs savings that Solaris will experience if it outsources production of 9 these internal power conditioners. Manufacture Outsource Cost of Producing Part #770's Difference 10 Internally Production 11 Variable Costs: 12 Direct Materials 13 Direct Labor 14 Variable Manufacturing Overhead 15 Avoidable Fixed Costs 16 Purchase Cost of Outsourcing 17 Total Expected Cost of Part #77c's Using the results of this differential analysis, determine the amount of capital that Solaris, Inc. will free up by outsourcing 18 production of part #77c-an internal power conditioner. 19 Amount of Free Capital Created by Outsourcing Production 20 21
Please help, in the second picture both questions are needed, thank you!!!
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