Question: A department makes a product whose contribution per unit is 1,200 and which takes 60 hours of machine time. A component used in this product

A department makes a product whose contribution per unit is 1,200 and which takes 60 hours of machine time. A component used in this product incurs a marginal cost of 250 (taking 8 hours of machine time). The department is working at full capacity. An external supplier has offered to supply the component at a price of 400 per component. What is your advice to the department?

Step by Step Solution

★★★★★

3.43 Rating (156 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Answer Please accept the order from external supplier Explanation First we n... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

8. A common use for sequential coding is (1 Point) O identifying inventory items identifying documents O creating the chart of accounts identifying fixed assets

Graphic Components (GC) has offered to supply the Federal Aviation Agency (FAA) with computer monitors at "cost plus 20 percent." GC operates a manufacturing plant that can produce 22,000 monitors...

Alameda Instruments (AI) has offered to supply the Air Force with computer monitors at cost plus 20 percent. AI operates a manufacturing plant that can produce 44,000 monitors per year, but it...

Suppose that there are currently four producers of tyres in Australia Allcar, Bootstone, Carstuff and Duddos. There are no imported tyres in Australia and there are significant barriers to new...

Rob Otics Ltd, a small business that specialises in manufacturing electronic-control equipment, has just received an inquiry from a potential customer for eight identical robotic units. These would...

Rob Otics Ltd, a small business that specialises in manufacturing electronic-control equip- ment, has just received an enquiry from a potential customer for eight identical robotic units. These would...

2.7 Rob Otics Ltd, a small business that specialises in manufacturing electronic-control equipment, has just received an enquiry from a potential customer for eight identical robotic units. These...

Bikes "R" Us makes three different types of bicycles: Mountain Bikes, Road Bikes, and Dirt Bikes. Bikes "R" Us is faced with making two important decisions -- one decision will impact the company in...

Kantrovitz Company is a manufacturer of industrial components. One of its products that is used as a subcomponent in appliance manufacturing is AP110. This product has the following information per...

You just starred a summer internship with the successful management consulting firm of Kirk, Spock, and McCoy. Your first day on the job was a busy one, as the following problems were pre sented to...

10) (5 points) Determine if the following are true or false. You do not need to explain. a) A random variable is continuous. For any value a, P(X = a) ~ 0 always. b) A standard normal curve means...

In real estate, what are the competing interests between priority of federal vs. state tax liens? I need typed answer with explanation

Consider the following root's loci. 5 4 3 2 O Imaginary Axis (seconds) 3 -4 -5 -20 Root Locus -15 -10 -5 Real Axis (seconds) The angle of departure from the complex poles can be approximated by: A...

Use pivot table, privot chart, and basic excel functions to answer the following questions for data in "econ" tab. 1. For each of the variables in the next tab "econ": what is the average, the...

Question 18 1 pts For the gear trains sketched in the given figures, compute the output speed of the output shaft if the input shaft rotates at 1750 rpm (Accuracy .X RPM, don't include +'s or -'s...

Explain what cloud service the New York Times successfully utilized and the benefit this solution provided.

Camila Company has set the following standard cost per unit for direct materials and direct labor. Direct materials (16 pounds @ $4 per pound) $ 64 Direct labor (2 hours @ $15 per hour) 30 During...

Refer to the data in QS 10-1. Based on financial considerations alone, should Helix accept this order at the special price? Explain.

A dc servomotor drives the x-axis of a NC milling machine table. The motor is coupled directly to the table lead screw, whose pitch = 6.25 mm. An optical encoder is connected to the lead screw. The...

What are the three problem areas that must be considered in the analysis and design of an automated production line?

What are the typical hardware components of a workstation parts delivery system?

Refer back to problem 23. Suppose Big Oil starts from the financing mix in Table 13.2, and then borrows an additional $200 million from the bank. It then pays out a special $200 million dividend,...

Food-Galore, Inc., has a $10 million outstanding bond issue, carrying a 12% coupon interest rate with 20 years remaining to maturity. This issue was sold 5 years ago and can be called by the company...

Universal Heavy Equipment is looking into the possibility of refunding its 30-year $100 million outstanding bond issue, carrying a 14% coupon rate, which was sold 10 years ago. If the company goes...