Problem: Module $6$ Textbook Problem $6$

Learning Objective: $6-3$ Make appropriate outsourcing decisions

Campbell Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of

producing $9,200$ containers follows.

$*$One$-$third of these costs can be avoided by purchasing the containers.

Russo Container Company has offered to sell comparable containers to Campbell for $$2\mathrm{.}80$ each.

Required

a$.$ Calculate the total relevant cost. Should Campbell continue to make the containers?

b$.$ Campbell could lease the space it currently uses in the manufacturing process. If leasing would produce $$12,600$ per month,

calculate the total avoidable costs. Should Campbell continue to make the containers?

a$.$ Total relevant cost

Should Campbell continue to make the containers?

b$.$ Total avoidable cost

Should Campbell continue to make the containers?