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Redbud Company uses a certain part in its manufacturing process that it buys from an outside supplier for $36 per part plus another $5 for
Redbud Company uses a certain part in its manufacturing process that it buys from an outside supplier for $36 per part plus another $5 for shipping and other purchasing-related costs. The company will need 18,000 of these parts in the next year and is considering making the part internally. After performing a capacity analysis, Redbud determined that it has sufficient unused capacity to manufacture the 18,000 parts but would need to hire a manager at an annual salary of $54,000 to oversee this production activity. Estimated production costs are determined to be as follows: Required: a. Identify the relevant costs to make this part internally. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) b. Should Redbud produce the part or continue to buy it from the outside supplier? Multiple Choice Redbud should produce the part. Redbud is indifferent about the decision. Redbud should continue to buy it from the outside supplier. c. What are the other factors that Redbud Company should consider in deciding to make the part internally? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Total sales quantity. The potential for improved control over the availability of the parts by having it when needed and the potential for improved of the parts. capacity for more profitable activities
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