Use the information below to answer the following question(s):
Star Appliance manufactures a variety of appliances which all use Part 92F. Currently, Star Appliance manufactures Part 92F itself. It has been producing 8,000 units of Part 92F annually. The annual costs of producing Part 92F at the level of 8,000 units include:

All of the fixed manufacturing overhead costs would continue whether Part 92F is made internally or purchased from an outside supplier. Star Appliance has no alternative use for the manufacturing facilities.
-Roger Parts Company has offered to sell 8,000 units of Part 92F to Star Appliance for $22.00 per unit. What should Star Appliance do?

Question

Use the information below to answer the following question(s):
Star Appliance manufactures a variety of appliances which all use Part 92F. Currently, Star Appliance manufactures Part 92F itself. It has been producing 8,000 units of Part 92F annually. The annual costs of producing Part 92F at the level of 8,000 units include:
  
All of the fixed manufacturing overhead costs would continue whether Part 92F is made internally or purchased from an outside supplier. Star Appliance has no alternative use for the manufacturing facilities.
-Roger Parts Company has offered to sell 8,000 units of Part 92F to Star Appliance for $22.00 per unit. What should Star Appliance do?

Quizplus · Accepted Answer

Without specific cost details provided in the question, it's impossible to calculate the exact savings or losses for Star Appliance. However, the correct choice is determined by the context or additional information that might have been provided earlier, which isn't visible in this isolated question. Typically, such a question would be based on a comparison of the cost to make the part in-house versus the cost to buy the part from Roger Parts Company.

Use the Information Below to Answer the Following Question(s)