Solved

Doro Fill Company Fabricates Automobiles A Factory in Indonesia Has Offered to Supply Doro Fill

Question 151

True/False

Doro Fill Company fabricates automobiles.Each auto includes one wiring harness,which is currently made in-house.Details of the harness fabrication are as follows:
 Volume 300 units per month  Variable cost per unit $6 per unit  Fixed costs $15,000 per month \begin{array} { | l | l | l | } \hline \text { Volume } & 300 & \text { units per month } \\\hline \text { Variable cost per unit } & \$ 6 & \text { per unit } \\\hline \text { Fixed costs } & \$ 15,000 & \text { per month } \\\hline\end{array} A factory in Indonesia has offered to supply Doro Fill with ready-made units for a cost of $11 each.Assume that Doro Fill's fixed costs are unavoidable and that the company will not be able to use the excess capacity in any profitable manner.In order to maximize operating income,Doro Fill should not outsource.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents