2. Given the following data, determine the total annual cost of making with each of process...

Transcribed Image Text:

2. Given the following data, determine the total annual cost of making with each of process A and B and of buying. Estimated demand is 8,500 units a year. The operations manager has said that it would be possible to achieve a 12 percent reduction in the fixed cost of Process B and a 12 percent reduction in B's variable cost per unit. Would that be enough to change your answer if the estimated annual cost to achieve those savings was $5,000? Variable cost per unit Annual fixed cost Transportation cost per unit Process A $49 $42000 Make Process B $51 $34000 Process C $50 $2 2. Given the following data, determine the total annual cost of making with each of process A and B and of buying. Estimated demand is 8,500 units a year. The operations manager has said that it would be possible to achieve a 12 percent reduction in the fixed cost of Process B and a 12 percent reduction in B's variable cost per unit. Would that be enough to change your answer if the estimated annual cost to achieve those savings was $5,000? Variable cost per unit Annual fixed cost Transportation cost per unit Process A $49 $42000 Make Process B $51 $34000 Process C $50 $2

Answer rating: 100% (QA)

To determine the total annual cost of making with each process A and B and of buying we need to consider the variable costs fixed costs and transporta... View the full answer