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Determine whether it is best for you to continue manufacturing the part or purchase it from the supplier. • Calculate the profit or loss you would have if you accepted the supplier's proposal.

Determine whether it is best for you to continue manufacturing the part or purchase it from the supplier. • Calculate the profit or loss you would have if you accepted the supplier's proposal.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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The Svenson corporation manufactures cell phones. It manufactures its own circuit boards for cell phones, an important part for the cell phone.
The unit variable cost of raw materials is $180
The variable unit labor cost is $65.
The unit variable cost of indirect costs is $13
Fixed costs are $6,000
The number of parts it manufactures is 700 cell phones in a month.
Morly, an electrical parts supplier, offers to sell you the board for $210 plus freight of $8 per unit.
• Determine whether it is best for you to continue manufacturing the part or purchase it from the supplier.
• Calculate the profit or loss you would have if you accepted the supplier's proposal.

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