Part $(a)$ requires a discussion. Prepare a single paragraph identifying $5$ points supporting your answer $to$ the question.

Discuss whether Jim Wright should have analyzed only the costs and savings that Mowerson will realize $in2020.$

Case $2-2$: Mowerson Division

The Mowerson Division $of$ Brown Instruments manufactures testing equipment for the automobile

industry. Mowerson's equipment $is$ installed $in$ several places along $an$ automobile assembly line for

component testing and $is$ also used for recording and measurement purposes during track and road

tests. Mowerson's sales have grown steadily, and revenue will exceed $$200$ million for the first time

$in2019.$

Mowerson designs and manufactures its own printed circuit boards $(PCBs)$ for use $in$ the test

equipment. The $PCBs$ are manually assembled $in$ the Assembly Department, which employs $45$ tech$-$

nicians. Because $of$ a lack $of$ plant capacity and a shortage $of$ skilled labor, Mowerson $is$ considering

having the printed wowh boards manufactured $by$ Tri$-$Star, a specialist $in$ this field. Quality control

contracted $toan$ outside vendor. The per$-$board cost $of$ outside manufacture $is$ higher than $of$

house cost; however, management thinks that savings could ald $to$ prepare a financial analysis

Jim Wright, a recently hired cost analyst, has bucludes the assumptions $he$ used $in$ his anaft$($$$28,50040)$

Assembly supervisor transferred

Floor space savings

$(1,000$$$9\mathrm{.}50)+(8,000$$$6\mathrm{.}00)$

Purchasing clerk, $\frac{1}{2}$ time $on$ special project

Purchase order reduction

$$1,140$

$35$

$(2,000$ orders @ $$1\mathrm{.}25$ each$)$

Reduced freight expense

Total savings

Costs

Increased production cost

$[($$$60\mathrm{.}0052\mathrm{.}00)100,000$ units $]$

Hire junior engineer

Hire quality control inspector

$$800,000$

Increased storage cost for safety otom $20\mathrm{.}000$