Apple continues to trend in the world of technology with its most recent introduction of AirTags. Apple is trying to decide if it wishes to continue to manufacture the AirTag in-house, or if it should consider outsourcing the production of this particular accessory. The unit cost to produce one AirTag is $8 ($3 unit variable cost and $5 unit fixed cost). Apple has found a vendor that is willing to manufacture and sell the AirTag to Apple for resale at a unit price of $4 per AirTag.
a. If Apple is not able to avoid any of the unit fixed costs, should it consider outsourcing the production of the AirTags? Show all computations.
b. If Apple is able to avoid all of the unit fixed costs, should it consider outsourcing the production of the AirTags? Show all computations.

Question

Quizplus · Accepted Answer

The Answer of Apple continues to trend in the world of technology with its most recent introduction of AirTags. Apple is trying to decide if it wishes to continue to manufacture the AirTag in-house, or if it should consider outsourcing the production of this particular accessory. The unit cost to produce one AirTag is $8 ($3 unit variable cost and $5 unit fixed cost). Apple has found a vendor that is willing to manufacture and sell the AirTag to Apple for resale at a unit price of $4 per AirTag.
a. If Apple is not able to avoid any of the unit fixed costs, should it consider outsourcing the production of the AirTags? Show all computations.
b. If Apple is able to avoid all of the unit fixed costs, should it consider outsourcing the production of the AirTags? Show all computations.

Apple Continues to Trend in the World of Technology with Its