Quirch Inc. manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor who would provide 2,400 units of product PQ107 for Valters for a price of $150,000. If Quirch does not purchase these parts from the subcontractor it must produce them in-house with the following costs: In addition to the above costs, if Quirch produces part PQ107, it would also have a retooling and design cost of $9,800. The relevant costs of producing 2,400 units of product PQ107 are:

Question

Quirch Inc. manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor who would provide 2,400 units of product PQ107 for Valters for a price of $150,000. If Quirch does not purchase these parts from the subcontractor it must produce them in-house with the following costs:  In addition to the above costs, if Quirch produces part PQ107, it would also have a retooling and design cost of $9,800. The relevant costs of producing 2,400 units of product PQ107 are:

Quizplus · Accepted Answer

The Answer of Quirch Inc. manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor who would provide 2,400 units of product PQ107 for Valters for a price of $150,000. If Quirch does not purchase these parts from the subcontractor it must produce them in-house with the following costs:  In addition to the above costs, if Quirch produces part PQ107, it would also have a retooling and design cost of $9,800. The relevant costs of producing 2,400 units of product PQ107 are: