A supplier offers to make the wheels at a price of 8

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Supply Chain Management: A Logistics Perspective
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Chapter 13 / Exercise 6
Supply Chain Management: A Logistics Perspective
Coyle/Langley
Expert Verified
A supplier offers to make the wheels at a price of $8 each. If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated, but the $84,000 of fixed manufacturing overhead currently being charged to the wheels will have to be absorbed byother products.Required:a.Prepare an incremental analysis for the decision to make or buy the wheels.b.Should Sarasota Bicycles buy the wheels from the outside supplier? Justify your answer.Answer:
Diff: 3Objective: 2AACSB: Application of knowledge75) Explain what revenues and costs are relevant when choosing among alternatives.
Diff: 2Objective: 2AACSB: Analytical thinking76) Explain why sunk costs are not considered relevant when choosing among alternatives with example.
Diff: 2Objective: 2AACSB: Analytical thinking
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Supply Chain Management: A Logistics Perspective
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Chapter 13 / Exercise 6
Supply Chain Management: A Logistics Perspective
Coyle/Langley
Expert Verified
77) Assume you are a sophomore in college and are committed to earning an undergraduate degree. Your current decision is whether to finish college in four consecutive years or take a year off and work for some extra cash.a.Identify at least two revenues or costs that are relevant to making this decision. Explainwhy each is relevant.b.Identify at least two costs that would be considered sunk costs for this decision.c.Identify at least two opportunity costs for this decision.d.Comment on at least one qualitative consideration for this decision.Answer:

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