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Determine the relevant costs for this order

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Reference no: EM131969020

Question - The assembly division of Davenport, Inc. is bidding on an order of 50,000 smart phones. The division is eager to get this order because it has a substantial amount of unused plant capacity. The variable cost for each smart phone is $140 in addition to the cost of the display and touchscreen component. One is from Davenport's electronics division. This bid is $35 per unit, although its variable cost is only $30 per unit. The other is from an outside vendor for $34 per unit. Davenport's electronics division has sufficient unused capacity for this order.

A - Determine the relevant costs for this order for the assembly division under both internal and outsourcing arrangements.

B - Determine the relevant costs for this order for Davenport as a company under each of the sourcing arrangements.

Reference no: EM131969020

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