Cari Pump manufactured 9,000 ECs in 2019 in 30 batches of 300 each. In 2020, Cari Pump anticipates needing 10,500 ECs. The ECs would be produced in 60 batches of 175 each. A supplier, Furry Deals has enquired about supplying ECs to Cari Pump in 2020 at $350 per EC on whatever delivery schedule Cari Pump wants. Required: Part A 1. Calculate the total expected manufacturing cost per unit of making ECs in 2020? 2. Suppose the capacity currently used to make ECs will become idle if Cari Pump purchases ECs from Furry Deals. Using quantitative analysis alone, should Cari Pump make ECs or buy them from Furry Deals? 3. Suppose that if Cari Pump purchases ECs from Furry Deals, its best alternative use of the capacity currently used for ECs is to make and sell special electronic components (SECS) to the Spec Company. Cari Pump estimates the following incremental revenues and costs from SECs: Total expected incremental future revenues Total expected incremental future costs $2,200,000 $2,350,000 On the basis of quantitative analysis alone, should Cari Pump make ECs or buy them from Furry Deals?
Cari Pump manufactured 9,000 ECs in 2019 in 30 batches of 300 each. In 2020, Cari Pump anticipates needing 10,500 ECs. The ECs would be produced in 60 batches of 175 each. A supplier, Furry Deals has enquired about supplying ECs to Cari Pump in 2020 at $350 per EC on whatever delivery schedule Cari Pump wants. Required: Part A 1. Calculate the total expected manufacturing cost per unit of making ECs in 2020? 2. Suppose the capacity currently used to make ECs will become idle if Cari Pump purchases ECs from Furry Deals. Using quantitative analysis alone, should Cari Pump make ECs or buy them from Furry Deals? 3. Suppose that if Cari Pump purchases ECs from Furry Deals, its best alternative use of the capacity currently used for ECs is to make and sell special electronic components (SECS) to the Spec Company. Cari Pump estimates the following incremental revenues and costs from SECs: Total expected incremental future revenues Total expected incremental future costs $2,200,000 $2,350,000 On the basis of quantitative analysis alone, should Cari Pump make ECs or buy them from Furry Deals?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hi please answer part A thanks
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