(All of the Values are correct. All i need to know here are the total manufactur
ID: 1165946 • Letter: #
Question
(All of the Values are correct. All i need to know here are the total manufacturing and purchase cost associated with the recommendation.)
Roedel Electronics produces tablet computer accessories, including integrated keyboard tablet stands that connect a keyboard to a tablet device and hold the device at a preferred angle for easy viewing and typing. Roedel produces two different sizes of integrated keyboard tablet stands, small and large. Each size uses the same keyboard attachment, but the stand consists of two different pieces, a top flap and a vertical stand that differ by size. Thus, a completed integrated keyboard tablet stand consists of three subassemblies that are manufactured by Roedel: a keyboard, a top flap and a vertical stand.
Roedel's sales forecast indicates that 7,000 small integrated keyboard tablet stands and 5,000 large integrated keyboard tablet stands will be needed to satisfy demand during the upcoming Christmas season. Because only 500 hours of in-house manufacturing time are available, Roedel is considering purchasing some, or all, of the subassemblies from outside suppliers. If Roedel manufactures a subassembly in-house, it incurs a fixed setup cost as well as a variable manufacturing cost. The following table shows the setup cost, the manufacturing time per subassembly, the manufacturing cost per subassembly, and the cost to purchase each of the subassemblies from an outside supplier:
Manufacturing Subassembly Setup Cost ($) Time per Unit (min.) Cost per Unit ($) Purchase Cost per Unit ($) Keyboard 1,000 0.9 0.40 0.65 Small top flap 1,200 2.2 2.90 3.45 Large top flap 1,900 3.0 3.15 3.70 Small vertical stand 1,500 0.8 0.30 0.50 Large vertical stand 1,500 1.0 0.55 0.70Explanation / Answer
Total cost ( keyboard) = $1000 + 12000*.40 = $5800
Total Cost ( small top flap ) = $1200+ $2.90*7000 = $21500
Manifacturing cost = $5800+ $21500 = $27300
Purchasing cost
Keyboard = $0.65*12000= $7800
Small top flap = $3.45*7000= $24150
Small vertical stand = $0.50*7000= $3500
Large vertical stand = $.70*5000 = $3500
Total purchase cost = $7800+ $24150+ $3500+ $3500 = $38950
B) Manifacturing cost = small flap top + large flap top
Manifacturing cost = $1200+ $2.90*7000= $21500 + $1900+$3.15*5000 = $17650+ $21500 = $39150
Purchase c ost = keyboard cost + large stand cost + small stand cost
Purchase cost = $7800+ $3500+$3500 = $14800
Yes machinery should be purchased because production cost is too high to bear.
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