A Manufacturing Company Needs to Know Whether to Make In-House

question 39

Essay

A manufacturing company needs to know whether to make in-house or buy a roller gear assembly for its new fax machine production. The company expects to produce 9,000 units per year. The following estimates have been made:
a.What is the annual cost to make the roller gear assembly in-house?
b.What is the annual cost to buy the roller gear assembly?
c.At what volume are they indifferent regarding the decision to make or buy?

Recognize the expertise and role of a therapist in solution-focused therapy.

Explore future trends and criticisms of constructivist therapies including narrative and solution-focused approaches.

Understand the effects and mechanisms of various psychoactive drugs.

Recognize the impact of drug abuse on physical and mental health.

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Definitions:

Average Total Cost

The cost per unit is calculated by dividing the sum of fixed and variable production costs by the total quantity of units produced.

Market Price

The current price at which an asset or service can be bought or sold in a particular marketplace.

Marginal Revenue

The profit gained by selling an extra unit of a product or service.

Market Price

The ongoing cost at which one can purchase or sell a good or service in the market.