Quiett Truck Manufactures Part WB23 Used in Several of Its

question 87

Essay

Quiett Truck manufactures part WB23 used in several of its truck models. 10,000 units are produced each year with production costs as follows:
Quiett Truck has the option of purchasing part WB23 from an outside supplier at $11.20 per unit. If WB23 is outsourced, 40% of the fixed costs cannot be immediately converted to other uses.
Required:
a. Describe avoidable costs. What amount of the WB23 production costs is avoidable?
b. Should Quiett Truck outsource WB23? Why or why not?
c. What other items should Quiett Truck consider before outsourcing any of the parts it currently manufactures?

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Definitions:

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Quantitative assessments derived from tests designed to measure various aspects of an individual’s personality traits and characteristics.

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The inclination to attribute the actions of others more to their character traits than to the external situations influencing them, downplaying the impact of contextual circumstances.

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External factors that restrict or dictate an individual's behavior, reducing freedom of action.

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The act of judging something to be smaller or less important than it actually is, often leading to miscalculation or oversight.