IDNLearn.com connects you with a global community of knowledgeable individuals. Discover in-depth and reliable answers to all your questions from our knowledgeable community members who are always ready to assist.
Sagot :
To determine whether Almost Summer Break (ASB) should make their own components or purchase them from a third party, we need to calculate the total per unit cost of making the component. Here are the costs provided:
- Direct materials: $1.50
- Direct labor: $8.75
- Variable overhead: $2.80
- Fixed overhead: $3.50
Adding these costs together gives us the total per unit cost to make the component:
\[ \text{Total per unit cost} = \$1.50 + \$8.75 + \$2.80 + \$3.50 \]
Let's calculate this:
\[ \text{Total per unit cost} = \$16.55 \]
Therefore, the total per unit cost for ASB to make the component is $16.55.
ASB should compare this cost with the price quoted by the third party to determine the more economical option. If the third-party cost is less than $16.55 per unit, it would be cheaper to purchase the component. If it is more, then ASB should consider making the component in-house. Additionally, ASB should consider other factors such as quality, reliability, and any potential strategic advantages or disadvantages in making or buying the component.
- Direct materials: $1.50
- Direct labor: $8.75
- Variable overhead: $2.80
- Fixed overhead: $3.50
Adding these costs together gives us the total per unit cost to make the component:
\[ \text{Total per unit cost} = \$1.50 + \$8.75 + \$2.80 + \$3.50 \]
Let's calculate this:
\[ \text{Total per unit cost} = \$16.55 \]
Therefore, the total per unit cost for ASB to make the component is $16.55.
ASB should compare this cost with the price quoted by the third party to determine the more economical option. If the third-party cost is less than $16.55 per unit, it would be cheaper to purchase the component. If it is more, then ASB should consider making the component in-house. Additionally, ASB should consider other factors such as quality, reliability, and any potential strategic advantages or disadvantages in making or buying the component.
Thank you for participating in our discussion. We value every contribution. Keep sharing knowledge and helping others find the answers they need. Let's create a dynamic and informative learning environment together. Your questions find clarity at IDNLearn.com. Thanks for stopping by, and come back for more dependable solutions.
