Models of automatic dishwashers

Reference no: EM13826302

Problem:

DeMarcus Industries manufactures a widget used in several models of its automatic dishwashers. Monthly production costs for 5,000 units are:

Direct materials $40,000

Direct labor 10,000

Variable support costs 25,000

Fixed support costs 20,000

Total costs $95,000

It is estimated that 20% of the fixed support costs assigned to the widgets will no longer be incurred if the company purchases the part from the outside supplier for $15.50 per unit. Considering all relevant information, what should DeMarcus do?

Additional Information:

This question is basically belongs to the Finance as well as it explains about the decision that the firm should take about purchasing the product.

Reference no: EM13826302

Questions Cloud

Report on sustainable fashion by timberland : Report On Sustainable Fashion By Timberland

What is the origin and purpose of the taa program : These questions from economics and the questions deal with international trade. Abraham Lincoln's quote on buying goods from foreign country has been discussed.

After-tax cash inflow expected from liquidation : Expansion versus replacement cash flows Edison Systems has estimated the cash flows over the 5-year lives for two projects, A and B. After-tax cash inflow expected from liquidation. If project A were actually a replacement for project B and the $12,0..

Irrelevant to the value of the firm : It can be argued that whether a company pays or does not pay dividends; it is irrelevant to the value of the firm. State some of those arguments do you concur with these arguments or do you disagree?

Models of automatic dishwashers : DeMarcus Industries manufactures a widget used in several models of its automatic dishwashers. Monthly production costs for 5,000 units are:

Which a multi-metaphor analysis of the situation is required : This problem belongs to Business Management and it deals with a managerial situation or problem or event which a multi-metaphor analysis of the situation is required. Metaphors have been part of literature since times immemorial

Calculate the payback period for the proposed investment : Payback, NPV, and IRR Rieger International is attempting to evaluate the feasibility of investing $95,000 in a piece of equipment that has a 5-year life. Calculate the payback period for the proposed investment. Calculate the net present value (NPV) ..

Report on development and management of strategic marketing : Report On Development And Management Of Strategic Marketing Plan

Explain about futures price calculation : Today is 31st May. The yield on T-bills is 3% per annum. The futures price for June 30th delivery of Gold is $1593.60 for December 30th delivery the price is $1600.00.

User Account

All Pages