A Night Vision Goggle Manufacturer Is Evaluating a Make- Versus-

question 10

Essay

A night vision goggle manufacturer is evaluating a make- versus- purchase situation for a component used in its low- priced products. The component can be purchased at a variable wholesale price of P = 1200 + 50X, where X is the number of items. Alternatively, the component can be produced with a direct material cost of $17 per item and direct labor cost of $38 per item. The manufacturing overhead is allocated at 150% of direct labor cost per item. If the company requires, on average, 575 items each year, should the item be purchased or manufactured?

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Definitions:

Prime-Time Television

The time period in television programming that captures the highest viewership, typically evening hours when audiences are the largest.

Surveys

Research methods involving the collection of data from a sample of individuals through their responses to questions.

Subjective

Influenced by personal feelings, tastes, or opinions.

Serendipity

The occurrence of events by chance in a happy or beneficial way, often leading to unexpected and serendipitous discoveries.