Harris Company Currently Produces a Component That It Uses in Making

question 31

Short Answer

Harris Company currently produces a component that it uses in making some of its products. Harris has calculated the following costs for making the component:
$\begin{array}{lr}\text { Unst-level costs }\\\\\text { Materials } & \$ 20 \\\text { Labor } & 28 \\\text { Overhead } & 2 \\\text { Allocated facility-level costs } & 10 \\\text { Total cost } & \$ 60\end{array}$ Harris is considering outsourcing the component. A supplier has offered to sell the component to Harris for $52 each. Harris needs 8,000 units each year.Required:Should Harris outsource the component? Support your answer with appropriate computations.

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Definitions:

Valid Argument

An argument where, if the premises are true, the conclusion necessarily follows.

Premise

A claim or assertion that leads to another being concluded or drawn as a logical consequence.

Definition

A statement that explains the meaning of a word or phrase.

Invalid Argument

A logical fallacy where the conclusion does not logically follow from the premises, regardless of the truth of the premises.