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Question 15 0.75 points Save Answer Exhibit 10-1 Aurora is a calculator manufacturer. One of Aurora's best-selling calculator is DT920P, a dual power calculator with
Question 15 0.75 points Save Answer Exhibit 10-1 Aurora is a calculator manufacturer. One of Aurora's best-selling calculator is DT920P, a dual power calculator with both solar and battery. The annual fixed costs for manufacturing the DT920P is $245,000, in addition, the variable cost is $5.6 for each unit produced. Now the management in Aurora is considering outsourcing the production of some products for next year. They have a bid from an outside firm to produce the calculator for $10 per unit. Although it is more expensive per unit to outsource the calculator ($10 versus $5.6), the fixed cost can be avoided if Aurora purchases rather than manufactures the product. Let us define the following q = quantity (number of units) required FC = the fixed cost of manufacturing VC = the per-unit variable cost of manufacturing P= the per-unit variable cost of purchasing Part of spreadsheet model is displayed following: B 245000 5.6 10 1 Aurora 2 3 Parameters 4 FC (Fixed cost of manufacturing 5 VC (Per-unit variable cost of manufacturing) 6 P(Per-unit variable cost of purchasing) 7 8 Model 99 (Quantity) 10 11 Total variable cost 12 TMC (Total cost to produce) 13 TPC (Total cost to outsource) 14 Saving due to Outsourcing 20000 Refer to Exhibit 10-1. The break-even point (the quantity for which saving due to outsourcing is 0) can be found using Excel's O a. SUMPRODUCT function O b.COUNTIF function O c. Goal Seek tool O d. Data Table tool
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