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Suppose that a manufacturer can produce a part for $8.00 with a fixed cost of $6,000. Alternately, the manulacturer could contract with a supplier in Asia to purchase the part at a cost of $12.00, which includes transportation a. If the anticipated production volume is 1,300 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 $6,000. Alternately, the manulacturer could contract with a supplier in Asia to purchase the part at a cost of $12.00, which includes transportation a. If the anticipated production volume is 1,300 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.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Suppose that a manufacturer can produce a part for $8.00 with a fixed cost of $6,000. Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of $12.00, which includes transportation a. If the anticipated production volume is 1,300 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.)
Transcribed Image Text:Suppose that a manufacturer can produce a part for $8.00 with a fixed cost of $6,000. Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of $12.00, which includes transportation a. If the anticipated production volume is 1,300 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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