Solution-Calculate net advantage or disadvantage to hp of

Calculate net advantage or disadvantage to hp of outsourcing

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Reference no: EM132502824

Assume a division of Hewlett-Packard currently makes 10,000 circuit boards per year used in producing diagnostic electronic instruments at a cost of $34 per board, consisting of variable costs per unit of $24 and fixed costs per unit of $10. Further assume Sanmina Corporation offers to sell Hewlett-Packard the 10,000 circuit boards for $34 each. If Hewlett-Packard accepts this offer, the facilities currently used to make the boards could be rented to one of Hewlett-Packard's suppliers for $27,000 per year. In addition, $5 per unit of the fixed overhead applied to the circuit boards would be totally eliminated.

Question 1: Should HP outsource this component from Sanmina Corporation?

Question 2: Calculate the net advantage (disadvantage) to HP of outsourcing the component from Samina Corporation. Use a negative sign with your answer to indicate a net disadvantage, if appropriate.

Reference no: EM132502824

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Calculate net advantage or disadvantage to hp of outsourcing : Calculate the net advantage (disadvantage) to HP of outsourcing the component from Samina Corporation. Use a negative sign with your answer.

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Calculate net advantage or disadvantage to hp of outsourcing

Reference no: EM132502824

Reference no: EM132502824

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