The Following Information Relates to Component AHB2 Manufactured by Aquarius

question 64

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:

Internet Sites

Online locations, accessible through URLs, that host a collection of related web pages, images, videos, or other digital assets.

Buyers And Sellers

Parties involved in the exchange of goods and services, where one provides the product and the other provides compensation.

Transaction Costs

Expenses incurred when buying or selling goods and services, which can include fees, taxes, and other costs associated with the exchange.

Exchange Broker

A person or entity that serves as an intermediary between buyers and sellers in financial markets, facilitating trades.