Question: QUESTION 19 Soft Macro Company currently outsources a critical component in one of its products Soft Micro purchases the switches from another company for $25
QUESTION 19 Soft Macro Company currently outsources a critical component in one of its products Soft Micro purchases the switches from another company for $25 each. The company is considering making this component internally at the following projected annual production costs: $ 2 Unit-level material cost 4 Unit-level labor cost $ Unit-level overhead $ Batch-level setup cost (5.000 units per batch) S 30,000 Product-level supervisory salaries $ 37.500 Allocated facility-level costs $ 20,000 The company expects an annual need for 5,000 switches. If the company makes the product at will have to utilize factory space currently being leased to another company for $2.000 per month Moreover the $37.500 cost is projected because the company would need to hire an additional supervisor. If the company decides to make the parts, total costs for the year will be $22.500 less than if the components are purchased 560.000 less than if the components we purchased $1,500 more than if the components are purchased $21.500 more than if the components are purchased
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