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Unformatted text preview: This is a make or buy problem that has all of the characteristics that are illustrated in the Make or Buy lecture and study problems 6-B1, 6-46, and Extra #4. Note that I do not ask you for the total costs if the firm makes and the total costs if the firm buys, but instead I ask you for the difference between these two total cost numbers. Make sure that you read the question carefully so that you can attach the correct sign (+ or -) to your numerical answer. ______________________________________________________ Oxford Engineering manufactures small engines. The engines are sold to manufacturers who install them in such products as lawn mowers. The company currently manufactures all the parts used in these engines but is considering a proposal from an external supplier to supply the starter assembly used in these engines. The starter assembly is currently manufactured in Division 3 of Oxford Engineering. Last year, Division 3 manufactured 160,000 starter assemblies, but over the next several years, it is expected that 185,000 assemblies will be needed each year. Total costs related to the starter assembly for last year over the next several years, it is expected that 185,000 assemblies will be needed each year....
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This note was uploaded on 09/16/2009 for the course ACCT 230 taught by Professor Jacobs during the Spring '08 term at Michigan State University.
- Spring '08