DC Electronics uses a standard part in the manufacture of several of its radios. The total cost of producing 30 000 parts is $90 000, which includes fixed costs of $33 000 and variable costs of $57 000. The company can buy the part from an outside supplier for $2.50 per unit, and avoid 30% of the fixed costs.
If DC Electronics decides to outsource the production of the part, how will it impact profit?

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The Answer of DC Electronics uses a standard part in the manufacture of several of its radios. The total cost of producing 30 000 parts is $90 000, which includes fixed costs of $33 000 and variable costs of $57 000. The company can buy the part from an outside supplier for $2.50 per unit, and avoid 30% of the fixed costs.
If DC Electronics decides to outsource the production of the part, how will it impact profit?

DC Electronics Uses a Standard Part in the Manufacture of Several