Should the company outsource and why

Assignment Help Finance Basics
Reference no: EM13505273

Mark Berenson is CEO of Montclair Electronics. He is currently producing 80,000 video telephones a year in his New Jersey plant, where fixed cost are $900,000 and the variable cost per unit is $5. By outsourcing to a Mexican firm, annual fixed cost payments will rise to $1 million.

a) When the variable cost of outsourcing is $4 per unit, what is the break-even quantity in this case? Please provide the formula, at least one step of calculation, and the correct answer for full credit.

b) Should the company outsource and why?

Reference no: EM13505273

Questions Cloud

Theory the mean of the sampling distribution of means : Theory the mean of the sampling distribution of means
Compute the molality of solution that is prepared by mixing : Calculate the molality of a solution that is prepared by mixing 25.5 mL of CH3OH (d= 0.792 g/mL) and 387 mL of CH3CH2CH2OH (d= 0.811 g/mL).
What is the rate of heat loss through the slab : A 10-m-by-14-m house is built on a 12-cm-thick slab of concrete. What is the rate of heat loss through the slab
Impact of variance on unit cost : How much of the 0.40 excess unit cost and how much of the 0.40 excess unit cost is traceable to apprerent inefficient use of labor time
Should the company outsource and why : When the variable cost of outsourcing is $4 per unit, what is the break-even quantity in this case? Please provide the formula, at least one step of calculation, and the correct answer for full credit.
Explain derive expressions for the positions of the lines : The expressions for the P-, Q-, and R-branches, assume that the moment of inertia of the molecule is the same in the excited vibrational states as in the ground state. Derive expressions for the positions of the lines without making these assumpti..
Find the average net force exerted on the bullet : A 21.5-g bullet is fired from a rifle. It takes 2.15 10-3 s for the bullet to travel the length of the barrel, and it exits the barrel with a speed of 620 m/s. find the average net force exerted on the bullet
Explain how many milliliters of the two stock solutions : 0.700L of formic acid-formate buffer with a pH of 3.74. How many milliliters of the two stock solutions of 1.25M HCOOH and 1.0M NaOH would you combine to make the 0.700L of buffer.
Find the length of the space curve : Find the length of the space curve

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Construct an example of the cycle of money

Construct an example of the cycle of money, identify all the players involved, and identify their individual benefits from participating in the cycle of money.

  Defining future value of money

You want to bank enough money to pay for 4 years of college at $20,000 per year for your child. The savings account will pay an effective rate of 5% per year.

  What are the portfolio weights

f a portfolio of the two assets has a beta of 2.26, what are the portfolio weights? How do you interpret the weights for the two assets in this case? Explain.

  Consider the prevailing conditions for the following

forecasting interest rates based on prevailing conditions.consider the prevailing conditions for the following factors

  Suppose that gm issues a bond with ten years until maturity

suppose that gm issues a bond with ten years until maturity a face value of 1000 and a coupon rate of 7annual payments.

  Determine the annual effective interest rate

Marilyn invests $3,500 at time 0 in order to receive payments of $450 at times 1 year, 2 years, 3 years, and so on, with the last payment at time 10 years. Determine the annual effective interest rate that Marilyn earns.

  Find the missing amounts for companies

Find the missing amounts for companies A, B, and C. And make the journal entries necessary to record the following eight transactions.

  Find the expected rate of return and standard deviation

If there is a 20% chance we will get a 16 percent return, a 30% chance of getting a 14 percent return, a 40% chance of getting a 12% return, and a 10 percent chance of getting an 8% return,

  How can management eliminate or reduce

Most employees choose to eat their lunch in the cafeteria. Is there an agency cost here? If so, how can management eliminate or reduce this agency cost?

  Using the graph and intuition determine whether there is a

when performing a regression analysis it is important to first identify your independentpredictor variable versus your

  Forecasting conclusions that support tfc’s decision

From the scenario, cite your forecasting conclusions that support TFC’s decision to expand to the West Coast market. Speculate as to whether or not the agency conflict discussed in the scenario could become a roadblock to your conclusions.

  Let a0 100 a1 112 and s0 34 dollars is it possible to

let a0 100 a1 112 and s0 34 dollars. is it possible to find an arbitrage opportunity if the forward price of stock

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd