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german
3 years ago
10

Saran Company has contacted Crane with an offer to sell it 5,100 of the wickets for $16 each. If Crane makes the wickets, variab

le costs are $14 per unit. Fixed costs are $8 per unit; however, $5 per unit is unavoidable. Should Crane make or buy the wickets?
Business
1 answer:
Natasha2012 [34]3 years ago
4 0

Answer:<em><u>Crane should buy the wicket as it result in saving of $ 1100</u></em>

Explanation:

Given:

Quantity = 5,100

Price = $16

Variable cost = $14 per unit

Fixed costs = $8 per unit

Buying Cost = 5100 * 16 = $ 81,600

Making Cost = Variable Costs + Avoidable Fixed Costs

Making Cost  = 14 * 5100 + (8 - 5) * 5100 = $ 86,700

Crane should buy the wicket as it result in saving of $ 1100 ($86,700 - $81,600).

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Answer:

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Explanation:

The productivity of the application process = total weekly cost incurred / weekly application output

Here we have average output of 600 application per week

And cost we have,

Total cost = weekly staff cost + weekly cost on computer technology

Weekly staff cost = 40 hours * 6 staff * $18 per hour rate = $ 4,320

Weekly cost on computer technology = $ 1200

Total cost = $4320 + $ 1200 = $5,520

Now productivity = $ 5,520 / 600 application = $ 9.2

Or we can say that it takes $ 9.2 to process one application

(b) Here we have average output of 650 application per week

And cost we have,

Total cost = weekly staff cost + weekly cost on computer technology

Weekly staff cost = 40 hours * 5 staff * $18 per hour rate = $ 3,600 ( assumed that one staff is reduced as one application evaluator is retiring and not replaced)

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Or we can say that it takes $ 8.31 to process one application

Percentage change in productivity ={ ($8.31 – $ 9.2 )/ $ 8.31 } * 100 = - 10.71%

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Answer:

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Explanation:

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⦁ a local drama company proposes a new neighborhood theater in san francisco. before approving the permit, the city planner comp
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