Question: GlobalSystems manuactures an optear switch that it uses in its finv product Global Systems inculted the following manufacturing costa when it prodoced 65,000 units last

 GlobalSystems manuactures an optear switch that it uses in its finv
product Global Systems inculted the following manufacturing costa when it prodoced 65,000
units last year. Read be reaviremens Gloten Syaterns does not yot know

GlobalSystems manuactures an optear switch that it uses in its finv product Global Systems inculted the following manufacturing costa when it prodoced 65,000 units last year. Read be reaviremens Gloten Syaterns does not yot know how many swiches it wia heod ths year, however. wil be ide cannot be used sor any other purpose, yet none of the foed costs are avoidable. is Docision: because the variatlo cost per unit to make the switch is Then the varistie cost per unt to suy the switch wilches a yoar rather than 65,000 swiches. What vovild the conpany do now? Complets an outsourcing decision analysis assuming fored costs can be woided by outsourcing production and the number of unts needed have increated. Data table st per unit to buy the switch. addition, because sales are incr ber of units needed have increas Requirements 1. Given the same cost structure, should GlobalSystems make or buy the switch? Show your analysis. 2. Now, assume that GlobalSystems can avoid $102,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing. GlobalSystems needs 70,000 switches a year rather than 65,000 switches. What should the company do now? 3. Given the last scutrario, what is the most GlobalSystems would be willing to pay to outsource the switches

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
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 Accounting Questions!