Revved Up Toys manufactures a computer chip used in the production of remote control cars. When 6,000 cars are produced, the costs per part are:
Sam's Associates has offered to sell Revved Up Toys 6,000 parts for $5.75 each. If Sarah accepts the offer, $1.00 of the fixed manufacturing overhead costs can be eliminated.
a. What is the relevant per unit cost to manufacture the part?
b. Which alternative is best for Revved Up Toys and by how much?
Definitions:
Leadership Success
The effectiveness with which a leader inspires, guides, and achieves goals through the management of others and resources.
Blake and Mouton
Creators of the Managerial Grid Model, which is a method for evaluating leadership styles based on concern for people and concern for production.
Human Relations Leader
A management approach focusing on the interpersonal aspects of managing, emphasizing motivation, communication, and employee well-being to improve productivity.
Leadership Grid
A framework for understanding leadership styles based on concern for people versus concern for production or results.
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