Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 2 Not complete Marked out of 1.00 P Flag question Outsourcing (Make-or-Buy) Decision Assume a division of Hewlett-Packard currently makes 10,000 circuit boards per
Question 2 Not complete Marked out of 1.00 P Flag question Outsourcing (Make-or-Buy) Decision Assume a division of Hewlett-Packard currently makes 10,000 circuit boards per year used in producing diagnostic electronic instruments at a cost of $36 per board, consisting of variable costs per unit of $24 and fixed costs per unit of $12. Further assume Sanmina Corporation offers to sell Hewlett-Packard the 10,000 circuit boards for $36 each. If Hewlett-Packard accepts this offer, the facilities currently used to make the boards could be rented to one of Hewlett-Packard's suppliers for $30,000 per year. In addition, $5 per unit of the fixed overhead applied to the circuit boards would be totally eliminated. Should HP outsource this component from Sanmina Corporation? Calculate the net advantage (disadvantage) to HP of outsourcing the component from Samina Corporation. Use a negative sign with your answer to indicate a net disadvantage, if appropriate. Check
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started