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:

Poverty Rates

Measures the proportion of the population living below the poverty line, reflecting the general state of economic deprivation in a society.

Great Compression

A period in the mid-20th century where income inequality significantly decreased in the United States, largely due to governmental policies and economic shifts.

Income Inequality

Describes the uneven distribution of income and wealth across different groups in a population, often measured by metrics like the Gini coefficient.

Gilded Age

A period in the late 19th century in the United States characterized by rapid industrialization, economic growth, and the ostentatious wealth of a burgeoning class of industrialists and financiers.