Make Buy A Company Has Needs 10,000 Units of a Component Used

question 5

Essay

Make Buy
A company has needs 10,000 units of a component used in producing one of its products.The latest internal accounting reports show that the per unit manufacturing cost to be $150.00.The manufacturing cost per component broken down into type of costs is as follows:Variable manufacturing costs = $110.00 and fixed manufacturing overhead = $40.The company recently received an offer from another manufacturer to produce the component for $144.00.If they buy the component on the outside 40% of the fixed overhead can be avoided.
Required:
a.If the company decides to have the component made by the outside supplier at $144.00,what is the impact on income?
b.What price would make the company indifferent between making the component internally and having the outside supplier make it?

Differentiate between aggression, violence, and antisocial behaviors and their societal impacts.

Understand the concept of emotional intelligence and its impact in workplace settings.

Recognize the effects of cognitive dissonance on behavior and attitude change.

Identify strategies for improving job satisfaction and employee morale.

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Definitions:

Lump Payment

A single, large payment made at once, as opposed to smaller, periodic payments.

Compounded Semi-Annually

This is the process where interest is added to the principal sum of a loan or deposit twice a year, resulting in interest being earned on interest from that point on.

Replacement Stream

A series of cash flows intended to replace the benefits of an asset or investment over time.

Payments

Payments refer to the amounts of money transferred from one party to another as compensation for goods or services, or as fulfillment of an obligation.