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The answer should be a brief explanation RCJH Inc., located in Lawrence, KS, is considering outsourcing production of one component used to manufacture its primary
The answer should be a brief explanation
RCJH Inc., located in Lawrence, KS, is considering outsourcing production of one component used to manufacture its primary product. The component is currently produced at an RCJH plant in the small community of Reading, located in Kansas. Per unit component costs are as follows: Direct Materials $ 7.00 Direct Labor 8.00 Variable Overhead 6.50 Fixed Overhead 4.50 Total Product Cost $26.00 Fixed overhead is composed of rent on the manufacturing facility and the production supervisor's salary, RCJH Inc. is in talks with a vendor located in Lenexa, Kansas. The vendor offers to make the component for $22.95 per unit. Since this is the only component manufactured at the Reading, KS plant, if RCJH accepts the vendor's offer, it will have to close the plant in Reading REQUIRED BRIEFLY describe two qualitative issues that RCJH Inc. should consider before making a final decision regarding outsourcing production of the component. Your description will be included in a final report to upper management, so make sure your description is professionally presented and descriptive using the fact pattern provided)
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