A Company Has Two Alternatives for Meeting a Customer Requirement

question 26

Multiple Choice

A company has two alternatives for meeting a customer requirement for 9,000 units of a specialty molding.If done in-house, fixed cost would be $350,000, with variable cost at $30 per unit.If outsourced, the cost is $80 per unit.Determine the breakeven point and determine if they should make the item in-house or outsource it.

• A)breakeven point = 7,000 units; outsource
• B)breakeven point = 7,000 units; make in-house
• C)breakeven point = 11,667 units; outsource
• D)breakeven point = 11,667 units; make in-house

Determine how to calculate degrees of freedom for treatments and errors in one-way ANOVA.

Interpret the F-test statistic and p-value in the context of ANOVA.

Distinguish between within-treatments and between-treatments variability.

Formulate null and alternative hypotheses for one-way ANOVA.

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Definitions:

Penalty

A fine or charge levied by the IRS for failure to comply with tax laws, such as late filing or underpayment of taxes.

Federal Tax Withholding

The portion of an employee's wages removed by the employer and sent directly to the government as partial payment of income tax.

FICA Withholding

The process by which employers withhold social security and Medicare taxes from their employees' paychecks, contributing to the FICA taxes owed.

Social Security Limit

The maximum amount of earnings on which Social Security payroll taxes are levied, also affecting the amount that can be received as Social Security benefits.