Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its...
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Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $6.50 per switch. Vista's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Annual fixed costs Variable cost per switch Machine A $ 812,150 Machine B $ 1,112,775 2.11 0.95 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? 2. What volume level would produce the same total costs regardless of the machine purchased? 3. What is the most profitable alternative for producing 260,000 switches per year and what is the total cost of that alternative? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? (Do not round intermediate calculations.) Minimum number of switches Machine A Machine B < Required 1 Required 2 > Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $6.50 per switch. Vista's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Annual fixed costs Variable cost per switch Machine A $ 812,150 Machine B $ 1,112,775 2.11 0.95 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? 2. What volume level would produce the same total costs regardless of the machine purchased? 3. What is the most profitable alternative for producing 260,000 switches per year and what is the total cost of that alternative? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? (Do not round intermediate calculations.) Minimum number of switches Machine A Machine B < Required 1 Required 2 >
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Required 1 Minimum Number of Switches for Each Machine Machine A Outside purchase cost per switch 6... View the full answer
Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
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