The Following Information Relates to Component AHB2 Manufactured by Aquarius

question 40

Essay

The following information relates to component AHB2 manufactured by Aquarius Electronics. $$\begin{array} { l l r } \text { Internal Manufacturing cost: } & \text { Direct materials } & \$ 30 \\\text { (per unit) } & \text { Direct labour } & 18 \\& \text { Variable manufacturing overhead } & 9 \\& \text { Fixed manufacturing overhead } & \underline { 17 } \\&& \underline { 74 } \\& \\\text { External acquisition price (per unit) } & & \$ 54\end{array}$$ REQUIRED:
a)Based on the financial data presented, should Aquarius continue to manufacture the part or source it from the external supplier?
b)What other factors need to be taken into account?

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Definitions:

Repression

A defense mechanism where undesirable thoughts, memories, or desires are unconsciously pushed out of conscious awareness.

Retrograde Amnesia

A type of memory loss where an individual cannot recall information that was learned before a specific event or injury.

Encoding Specificity

The principle that recall is most effective when information available at the time of encoding is also available at the time of retrieval.

Introductory Psychology

A beginner course offered in many educational institutions that covers the basic concepts, theories, and research findings in psychology.