Riverside Growers Corp manufactures garden tools in a factory in Taneytown, Maryland. Recently, the company designed a collection of tools for professional use rather

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Riverside Growers Corp manufactures garden tools in a factory in Taneytown, Maryland. Recently, the company designed a collection of tools for professional use rather than consumer use. Management needs to make a good decision about whether to produce this line in their existing space in Maryland, where space is available or to accept an offer from a manufacturer in Taiwan. Data concerning the decision are as follows: (Click the icon to view the data.) Read the requirements. Requirement 1. Should Riverside Growers Corp manufacture the 680,000 garden tools in the Maryland facility or purchase them from the supplier in Taiwan? Explain. The cost of manufacturing 680,000 garden tools in the Maryland facility is 680,000 garden tools from the Taiwan supplier is and the cost of purchasing Requirements 1. 2. 3. Should Riverside Growers Corp manufacture the 680,000 garden tools in the Maryland facility or purchase them from the supplier in Taiwan? Explain. Riverside Growers Corp believes that the U.S. dollar may weaken in the coming months against the New Taiwanese Dollar and does not want to face any currency risk. Assume that Riverside Growers Corp can enter into a forward contract today to purchase 27,300 NTD for $4.80. Should Riverside Growers Corp manufacture the 680,000 garden tools in the Maryland facility or purchase them from the Taiwan supplier? Explain. What are some of the qualitative factors that Riverside Growers Corp should consider when deciding whether to outsource the garden tools manufacturing to Taiwan? Print Done Data Table Expected annual sales of tools (in units) Average selling price of tools 680,000 $ 8 Price quoted by Taiwanese company, in New Taiwanese Dollars (NTD) Current exchange rate 27,300 9,100 NTD = $1 Variable manufacturing costs $2.70 per unit Incremental annual fixed manufacturing costs associated with the new product line $ 340,000 Variable selling and distribution costsa $0.70 per unit Annual fixed selling and distribution costsa $ 320,000 aSelling and distribution costs are the same regardless of whether the tools are manufactured in Maryland or imported. Print Done