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The Sundance Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the
The Sundance 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. Data table Requirement 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2021. More info Sundance manufactured 11,000CMCBs in 2020 in 55 batches of 200 each. In 2021, Sundance anticipates needing 17,000 CMCBs. The CMCBs would be produced in 100 batches of 170 each. The Marley Corporation has approached Sundance about supplying CMCBs to Sundance in 2021 at $350 per CMCB on whatever delivery schedule Sundance wants. 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 Sundance purchases CMCBs from Marley. On the basis of financial considerations alone, should Sundance make CMCBs or buy them from Marley? Show your calculations. 3. Now suppose that if Sundance purchases CMCBs from Marley, its best alternative use of the capacity currently used for CMCBs is to make and sell special circuit boards (CB3s) to the Excite Corporation. Sundance estimates the following incremental revenues and costs from CB3s: Total expected incremental future revenues $1,800,000 Total expected incremental future costs $1,900,000 On the basis of financial considerations alone, should Sundance make CMCBs or buy them from Marley? Show your calculations
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