[The following information applies to the questions displayed below.]Harbortown Marine Products (HMP) manufactures and sells various fixtures for boat cabins. One fixture uses a specializedfitting that is not used in any other HMP product. The management of HMP has considered outsourcing the fitting forseveral years but has never identified a suitable supplier. HMP has collected the following data on the cost of the fitting:MaterialsLaborManufacturing overheadTotalRivard Fittings, a local auto supplier, contacts HMP and tells them that because of the loss of one of Rivard's customers,there is enough capacity to produce up to 5,000 units of the fitting monthly. Rivard has offered to sell HMP any quantity(up to 5,000 units monthly) at a price of $20 per fitting.$ 6.404.8014.40$ 25.60If Rivard supplies all of the 3,000 fittings currently produced by HMP, HMP will avoid all of the variable overheadassociated with the fitting and one-third of the fixed overhead. Management estimates that variable overhead for thefitting is $4.80 per unit.Exercise 4-40 (Static) Make or Buy with Uncertain Costs (LO 4-4)Harbortown management is concerned about future changes in material prices arising from volatility in the commodities market.Required:At what unit costs for materials would HMP be just indifferent between making and buying the 3,000 units of the fitting if all other costsremain as predicted?Enter your answer in 2 decimal palces.Indifference pointper unit

Here, there are a total of two alternatives make or buy, I will determine the unit costs of material…

Answered: Required: At what unit costs for…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Required: At what unit costs for materials would HMP be just indifferent between making and buying the 3,000 units of the fitting if all other costs remain as predicted? Enter your answer in 2 decimal palces. Indifference point per unit