The operating income of S if it does outsources the manufacturing of the component.

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Answer 1

Question

Chapter 8, Problem 8.27AE

1.

To determine

The operating income of S if it does outsources the manufacturing of the component.

2.

To determine

The maximum price per unit that the S would be willing to pay if it outsources the component.

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L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. Question:

L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. In 2015, L.L. Bean expects to sell more than 500,000 pairs of its duck boots. As of late November 2015, the backorder quantity for Bean Boots was estimated to be about 50,000 pairs. Question: 1. Assume there is a 7% sales tax rate in Ohio, where the customer who ordered the boots is located. The sales tax on the order would be $7.63, which L.L. Bean adds to the invoice total. Is the $7.63 added to L.L. Bean's sales revenue? Why or why not?

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Answer 2

Question

Chapter 8, Problem 8.27AE

1.

To determine

The operating income of S if it does outsources the manufacturing of the component.

2.

To determine

The maximum price per unit that the S would be willing to pay if it outsources the component.

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Answer 3

Question

Chapter 8, Problem 8.27AE

1.

To determine

The operating income of S if it does outsources the manufacturing of the component.

2.

To determine

The maximum price per unit that the S would be willing to pay if it outsources the component.

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Answer 4

Question

Chapter 8, Problem 8.27AE

1.

To determine

The operating income of S if it does outsources the manufacturing of the component.

2.

To determine

The maximum price per unit that the S would be willing to pay if it outsources the component.

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Answer 5

Chapter 8, Problem 8.27AE

1.

To determine

The operating income of S if it does outsources the manufacturing of the component.

2.

To determine

The maximum price per unit that the S would be willing to pay if it outsources the component.

Answer 6

Chapter 8, Problem 8.27AE

1.

To determine

The operating income of S if it does outsources the manufacturing of the component.

Answer 7

Chapter 8, Problem 8.27AE

1.

To determine

The operating income of S if it does outsources the manufacturing of the component.

Answer 8

2.

To determine

The maximum price per unit that the S would be willing to pay if it outsources the component.

Answer 9

2.

To determine

The maximum price per unit that the S would be willing to pay if it outsources the component.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 8 - Prob. 1QC Ch. 8 - (Learning Objective 1) Keys to making short-term...Ch. 8 - (Learning Objective 2) Which is true of...Ch. 8 - (Learning Objective 3) Which of the following...Ch. 8 - Prob. 5QC Ch. 8 - Prob. 6QC Ch. 8 - (Learning Objective 4) A segment margin is the a....Ch. 8 - (Learning Objective 5) When resources are...Ch. 8 - (Learning Objective 6) Which of the following is...Ch. 8 - Prob. 10QC

The operating income of S if it does outsources the manufacturing of the component.

Solution Summary: The author calculates the operating income of S if it outsources manufacturing of the component.

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The operating income of S if it does outsources the manufacturing of the component.

The maximum price per unit that the S would be willing to pay if it outsources the component.

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