Business, 21.04.2020 23:28 stormserena
July Company currently outsources a relay switch that is a component in one of its products. The switches cost $20 each. The company is considering making the switches internally at the following projected annual production costs: Unit-level material cost $ 3 Unit-level labor cost $ 2 Unit-level overhead $ 1 Batch-level set-up cost (5,000 units per batch) $ 25,000 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, it will have to utilize factory space currently being leased to another company for $1,500 a month. Moreover the company would need to hire an additional supervisor. If the company decides to make the parts, total costs will be:
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July Company currently outsources a relay switch that is a component in one of its products. The swi...
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