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Problem # 3. Making outsourcing decisions_Fiber Systems




Question;Problem;# 3. Making outsourcing decisions;Fiber;Systems manufactures an optical switch that it uses in its final product. The switch;has the following manufacturing costs per unit: 1. $(3.00);Direct;Material $ 9.00;Direct;Labor 1.50;Variable;Overhead 5.00;Fixed;Overhead 9.00;Manufacturing;Product Cost $ 24.50;Another;company has offered to sell Fiber Systems the switch for $18.50 per unit.;If;Fiber Systems buys the switch from the outside supplier, the manufacturing facilities;that will be idled cannot be used for any other purpose, yet none of the fixed;costs are avoidable.;Prepare;an outsourcing analysis to determine whether Fiber Systems should make or buy;the switch.


Paper#37459 | Written in 18-Jul-2015

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