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
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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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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.) PI ary Lessit urchas ommu Clear All Cps Anewer View an Example Get More Help - Help Me Solve This Type here to search acer
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