Answered step by step
Verified Expert Solution
Question
1 Approved Answer
QUESTION 5 (20 marks) (A) Southwestern Company needs 1,000 motors in its manufacture of automobiles. It can buy the motors from Jinx Motors for $1,250
QUESTION 5 (20 marks) (A) Southwestern Company needs 1,000 motors in its manufacture of automobiles. It can buy the motors from Jinx Motors for $1,250 each. Southwestern's plant can manufacture the motors for the following costs per unit: Direct materials 55 500 Direct manufacturing labor 250 Variable manufacturing overhead 200 Fixed manufacturing overhead 350 Total $ 1 ,3 00 If Southwestern buys the motors from Jinx, 70% of the xed manufacturing overhead applied will not be avoided. Required: 1. Should the company make or buy the motors? Show your calculations. (8 marks) 2. Discuss what additional factors should Southwestern consider in deciding whether or not to make or buy the motors? (7 marks) (B) Discuss the issues and complications that may arise when multinational corporations conduct performance measurement and comparisons among divisions located in different countries
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