Answer: Financial advantage of $43,800
Explanation:
The cost to make the starters:
= Direct materials + Direct labor + Variable manufacturing overhead + Supervisor salary
= (6 * 73,000) + (3 * 73,000) + ( 0.6 * 73,000) + (1.90 * 73,000)
= $839,500
Cost to buy them = 73,000 * 12.10
= $883,300
Financial advantage (disadvantage) to making them = 883,300 - 839,500
= $43,800
<em>Rent and depreciation are not relevant to this decision because rent is not directly attributable to this product and depreciation is not based on wear and tear. </em>
Answer:
Annual ordering cost = = $30
Annual Holding Cost = $200
Explanation:
order size = Q1 = 200
Annual ordering cost = (A/Q1) x S = (400/200) x 15 = $30
Annual Holding Cost = (Q1/2) x H = (200/2) x 2 = $200
Answer:
Inflation is an increase in the general price level in an economy. It is probably caused by the relative increase in the amount of money in relation to the available economic production. If the social money supply increases and the country's production is not matched, the average price level will rise due to the increased demand for goods. Due to the price increases, the value of money, the purchasing power of money, decreases. You can buy less for the same amount, thus lowering demand.