Supler Corporation Produces a Part Used in the Manufacture of One

question 220

Multiple Choice

Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $18, computed as follows: An outside supplier has offered to provide the annual requirement of 4,000 of the parts for only $14 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:

• A) ($1) per unit on average
• B) $1 per unit on average
• C) $2 per unit on average
• D) ($4) per unit on average

Learn the application of various forecasting methods, including moving averages, causal methods, and time series analysis.

Understand the utility of tools such as Excel's Solver for minimizing forecast errors.

Grasp the concept of collaborative forecasting and its benefits in supply chain management.

Appreciate the challenges in forecasting for mature products and under variable demand or supply conditions.

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Definitions:

Simple Interest

A financial calculation approach where interest is only derived from the base amount, not including any interest that has built up over time.

Deposit Reached

Achieving the required minimum amount of money in an account to fulfill a particular condition.

Deposit Value

The amount of money placed in an account or invested, which can earn interest over time.

Interest Rate

The fraction at which a lender charges interest to a borrower for the amount of money lent.