Chapter 8, Lecture 2-students

Chapter 8, Lecture 2-students - Chapter 8 Short-term...

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Unformatted text preview: Chapter 8, Short-term Decision Making, Part 2 Please Pick Up Handout in the Back of the Room Copyright © 2010, School of Accountancy, Make or Buy Decisions (Outsourcing) Should a product be produced internally, or purchased from an external supplier? Is the supplier’s sales price less than our cost? W i l l w e l o s e c o n t r o l o v e r q u a l i t y a n d d e l i v e r y i f w e u s e a n o u t s i d e s u p p l i e r ? W i l l a n e x t e r n a l s u p p l i e r h a v e m o r e e x p e r i e n c e t h a n w e h a v e ? Copyright © 2010, School of Accountancy, Arizona The Make or Buy Decision (Outsourcing) - Example Laura manufactures part 777A that is currently used in one of its products. The unit cost to make this part is: D ire c t m a te ria ls $ 9 D ire c t la b o r 5 V a ria b le o v e rh e a d 1 D e p re c ia tio n o f sp e c ia l e q u ip . 3 S u p e rv iso r's sa la ry 2 G e n e ra l fa c to ry o v e rh e a d 1 0 T o ta l c o st p e r u n it 3 0 $ Copyright © 2010, School of Accountancy,...
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This note was uploaded on 01/12/2012 for the course ACC 241 taught by Professor Karengeiger during the Spring '08 term at ASU.

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Chapter 8, Lecture 2-students - Chapter 8 Short-term...

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