Question
Tara and Eddy have a that speakers. They have an idea for a new lightweight model. They could either produce this product in-house or outsource
Tara and Eddy have a that speakers. They have an idea for a new lightweight model. They could either produce this product in-house or outsource a third party to produce it on their behalf The firm currently has $ 500,000 in fixed manufacturing expenses If the item is produced in house , this would increase by 14%. On the other hand, if it is outsourced , fixed costs would be unchanged. The following table shows additional cost information : production Outsourcing Direct materials Direct labor Jariable manufacturing overhead cost Fixed manufacturing costs per unit to purchase from 3rd party house 0 $ $ 20 $ 10 $ 5 A ? $ B 40 Requirement : Fill in the Blanks variables A and B Requirement 2: Should the firm produce in- house or outsource ? Show your work to back up your answer .
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