Answered step by step
Verified Expert Solution
Link Copied!

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

image text in transcribed

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

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions