Consulting company that manufactures cell phones

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Reference no: EM132230835

You are consulting a company that manufactures cell phones. ? Currently, the company manufactures all portions of the cell phone internally for? $22 per unit? ($6.85 of direct? materials, $11.74 of direct? labor, and? $3.41 of fixed manufacturing? overhead). ?However, the company is considered outsourcing one part of the? phone, its circuit? board, to an outside supplier. The supplier quoted a price of? $4.50 per circuit board. If the company accepts the? supplier's offer, it is estimated that the total direct materials costs would be reduced by? 20% and total direct labor costs would be reduced by? 15%.

a) If the company decides to outsource the circuit? board, the total cost of the cell phone is $ per unit.? (Round to the nearest? cent.)(Show calculations)

b) Should the company you are consulting accept the outside? supplier's offer? why or why not?

c) The maximum price per circuit board that the company should be willing to pay the outside supplier is ?$ (Round to the nearest? cent.)(Show calculations)

Reference no: EM132230835

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