Harris Company Currently Produces a Component That It Uses in Making

question 118

Essay

Harris Company currently produces a component that it uses in making some of its products.Harris has calculated the following costs for making the part: $\begin{array}{|l|r|}\hline \text { Unit-level costs } & \\\hline \text { Materials } & \$ 20 \\\hline \text { Labor } & 28 \\\hline \text { Overhead } & 2 \\\hline \text { Allocated facility-level costs } & 10 \\\hline \text { Total cost } & \$ 60 \\\hline\end{array}$ 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:

Venue

A place where events, meetings, or activities are held.

Time Allotted

The specific amount of time assigned or allocated for a particular task, event, or activity.

Audience Size

The number of people who are exposed to or consume a particular piece of content or media.

Inform

To provide or disclose information or knowledge about a subject or topic.