London, Inc

question 70

Essay

London, Inc. uses 2,000 units of Part 8G3 each year in the manufacture of one of its products. The company currently produces the part internally, but an outside supplier has offered to provide the part at a price of $15 per part. If London chooses to purchase the part from the outside supplier, one half of it’s the fixed manufacturing overhead will be eliminated. London’s standard unit cost of producing the part is listed below.

Required
Ignoring qualitative factors, should London continue to make the parts internally or purchase them from the outside supplier? Why?

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Definitions:

Archetypes

Universally recognized symbols or patterns in the human psyche recurring across cultures and literature, often manifesting in dreams, fantasies, and behaviors.

Archetypes

Universally recognized symbols or patterns of behavior that are instinctively understood by all humans, often used in analyzing myths and storytelling.

Defense Mechanisms

Psychological strategies used unconsciously to protect oneself from anxiety arising from unacceptable thoughts or feelings.

Implicit Memories

Implicit memories are memories that influence our behaviors without conscious awareness, such as skills and procedures acquired through experience.