Suppose that a manufacturer can produce a part for $8.00 with a fixed cost of $3,000. Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of $9.00, which includes transportation. a. If the anticipated production volume is 1,500 units, compute the total cost of manufacturing and the total cost of outsourcing. b. What is the best decision? a. The total cost of manufacturing is $ (Simplify your answer.)
Suppose that a manufacturer can produce a part for $8.00 with a fixed cost of $3,000. Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of $9.00, which includes transportation. a. If the anticipated production volume is 1,500 units, compute the total cost of manufacturing and the total cost of outsourcing. b. What is the best decision? a. The total cost of manufacturing is $ (Simplify your answer.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Suppose that a manufacturer can produce a part for $8.00 with a fixed cost of $3,000. Alternately, the manufacturer could contract with a supplier in Asia to
purchase the part at a cost of $9.00, which includes transportation.
a. If the anticipated production volume is 1,500 units, compute the total cost of manufacturing and the total cost of outsourcing.
b. What is the best decision?
a. The total cost of manufacturing is $
(Simplify your answer.)
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