Question: Help me with the Make or Buy decision Question A Stoner combay uses three different components(kabenals m Manufacturing its primary product. Stoner Manufactures two of

 Help me with the Make or Buy decision Question A Stoner

Help me with the Make or Buy decision Question

A Stoner combay uses three different components(kabenals m Manufacturing its primary product. Stoner Manufactures two of the components and purchases one (designed as Component 1) from outside suppliers. The company is Currently developing the annual proft plan. Sales are Inghly seasonal, Componaut 2 cannot be acquired from The outsider, however, Component 3 can be purchased the three components have speaal speaficahon. The annual profet plan provided data for the following computahon: Component 3 nuit Cost Cat 12, God units) # Mafenal (brrect) 140 Labour (orrect) Fixed overheads Capporhuned Maduine for used fonly for Component 3) 0.50 Vanable factory overheads Average storage cost per year (fixed) 0.40 Total The purchase Manager investigated outside suppliers and found one that is willing to sign a one year contract to deliver 12,000 top quality Units as needed during the year at 45.20 per unit. A serious ansideration is being given to this alternative. buy component 3? 2-20 0.40 5.90 Should stoner make or

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