Subjective factors affect decision

Assignment Help Business Management

Reference no: EM1334910

Sunshine State Fruit Company sells premium quality oranges and other citrus fruits by mail order. Protecting the fruit during shipping is important, so the comapany has designed and produces shipping boxes. The annual cost to make 80,000 boxes is:

Materials $120,000
Labor 20,000
Indirect manufacturings costs:
variable 16,000
fixed 60000
total 216,000

Therefore, the cost per box averages $2.70. Suppose Weyerhaeuser submits a bid to supply Sunshine State with boxes for $2.40 per box. Sunshine State must give Weyerhaeuser the box design specifications, and the boxes will be made according to those specs.

1. How much, if any, would Sunshine State save by buying the boxes from Weyerhaeuser?

2. What subjective factors should affect Sunshine State's decision whether to make or buy the boxes?

3. Suppose all the fixed cost represent depreciation on equipment that was purchased for $600,000 and is just about at the end of its ten-year life. New replacement equipment will cost $1 million and is also expected to last ten years. In this case, how much, if any, would Sunshine State save by buying the boxes from Wyerhaeuser?

Reference no: EM1334910

Questions Cloud

Discuss the consistency of mutual fund performance : Discuss the consistency of mutual fund performance results, as studied by Goetzmann and lbbotsoni ndifferent between the after tax returns on a corporate bond paying.

Advantages and disadvantages salary administration strategy : Discuss the advantages and disadvantages of your choice resulting in your recommendation of whether this type is suitable for retaining employees in the Company or environment you chose.

Show the development of human resource : Training human resource and development of human resource is an important material to company. Please write a brief summary of how the material may be of value to you now and in the future.

Mission statement for prison facility : Could you help me form a Mission statement for a prison facility that I am creating for a project?

Subjective factors affect decision : What subjective factors should affect Sunshine State's decision whether to make or buy the boxes?

Explain what are types of intellectual property : Explain What are types of intellectual property and What real and personal property would you recommend that your client lease

Leader anticipation of human behavioral response : Human behavior is a complex phenomenon, and understanding it well is probably beyond the grasp of most of us who are not practicing psychologists; understanding how and why people choose particular behaviors is especially difficult.

Define edge in human resources : How do you define edge and how would you rate your ability to make the tough decisions to follow your values?

The limitations of traditional strategic choice models : Explain and discuss the limitations of traditional strategic choice models.

User Account

All Pages