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The Summer Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the
The Summer Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information about the costs of making CMCBs in 2020 and the expected costs in 2021: (Click the icon to view the costs.) (Click the icon to view the make-versus-buy information.) Read the requirements. Requirement 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2021. Data table Requirements 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2021. 2. Suppose the capacity currently used to make CMCBs will become idle if Summer purchases CMCBs from Maverick. On the basis of financial considerations alone, should Summer make CMCBs or buy them from Maverick? Show your calculations. 3. Now suppose that if Summer purchases CMCBs from Maverick, its best alternative use of the capacity currently used for CMCBs is to make and sell special circuit boards (CB3s) to the Everyday Corporation. Summer estimates the following incremental revenues and costs from CB3s: Total expected incremental future revenues $2,700,000 Total expected incremental future costs $2,800,000 On the basis of financial considerations alone, should Summer make CMCBs or buy them from Maverick? Show your calculations
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