Used in producing diagnostic electronic instruments

Assignment Help Financial Accounting

Reference no: EM13748696

Outsourcing (Make-or-Buy) Decision

Assume a division of Hewlett-Packard currently makes 8,000 circuit boards per year used in producing diagnostic electronic instruments at a cost of $33 per board, consisting of variable costs per unit of $26 and fixed costs per unit of $7. Further assume Sanmina-SCI offers to sell Hewlett-Packard the 8,000 circuit boards for $33 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 $29,000 per year. In addition, $3 per unit of the fixed overhead applied to the circuit boards would be totally eliminated.

Calculate the net benefit (cost) to HP of outsourcing the component from Samina-SCI. Use a negative sign with your answer, if appropriate.

Reference no: EM13748696

Questions Cloud

Respiration rate of banana fruit under aerobic conditions : Read and discuss an article "Respiration Rate of Banana Fruit Under Aerobic Conditions at Different Storage Temperatures" in 800 - 1000 words. Do some experiments and defend your own answer and explain why.

Inventories and property-plant and equipment : The following information is taken from the balance sheet of Raineer Plumbing: cash and cash equivalents, $50,000; accounts receivable, $130,000; inventories, ?; total current assets, $285,000; property, plant, and equipment (net), ?; total assets, $..

Harvard business school case study : Next, answer the following questions and provide your recommendation. Provide a rationale for your recommendation. There is a "help" spreadsheet that can be used to assist in completing the financial analysis and for organizing and summarizing the..

Hypothesis of how sdh activity will change in intact versus : Hypothesis of how SDH activity will change in intact versus punctured/broken mitochondria in the presence of the TCA cycle substrates, succinctness, and/or malate.

Used in producing diagnostic electronic instruments : Assume a division of Hewlett-Packard currently makes 8,000 circuit boards per year used in producing diagnostic electronic instruments at a cost of $33 per board, consisting of variable costs per unit of $26 and fixed costs per unit of $7. Further as..

The effectiveness of genetic rescue : The effectiveness of genetic rescue, such as that which occurred with the island's wolf population

What characteristics of virtual storage make this possible : The manual for a popular operating system points out that the number of concurrent users on the system can be increased if the users are sharing programs, such as editors, mail readers, or compilers. What characteristics of virtual storage make thi..

Compute the unit sales price at which blake must sell : Compute the unit sales price at which Blake must sell its product in the current year in order to earn a budgeted target profit of £200,000 - Calculate a value in response Unhappy about the prospect of a price increase, Blake's sales manager wou..

Age of confessional division produced religious war in spain : During the 16th century, The Age of Confessional Division produced religious wars in France, Spain, and the Netherlands. Choose one of these conflicts and discuss the events, causes, and outcomes.

User Account

All Pages