The Following Information Relates to Component AHB2 Manufactured by Aquarius

question 47

Essay

The following information relates to component AHB2 manufactured by Aquarius Electronics. $$\begin{array} { l l l } \text { Internal Manufacturing cost: } & \text { Direct materials } & \$ 30 \\\text { (per unit) }& \text { Direct labour } & \text { 18 } \\& \text { Variable manufacturing overhead } & 9 \\& \text { Fixed manufacturing overhead } & \underline { 17 } \\& & \underline { 74 }\end{array}$$ $\text { External acquisition price (per unit) }\quad\quad\$54$ 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?

• 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:

Reinforcement

A process in psychology and behavior analysis that strengthens a behavior or response due to the application of a stimulus (reward or punishment) after the behavior occurs.

Unpleasant Consequence

An undesirable result or effect that follows a particular action or decision.

Law of Immediate Reinforcement

A principle stating that behaviors are more likely to be repeated when they are immediately followed by a positive reinforcement.

Desirable Behaviour

Actions or reactions that are preferred or encouraged within a specific context due to their positive outcomes or alignment with set norms.