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Question - A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $160 per unit (100 bottles), including fixed costs of $34 per unit. A proposal is offered to purchase small bottles from an outside source for $104 per unit, plus $10 per unit for freight.
a. Prepare a differential analysis dated July 31 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Use a minus sign to indicate a loss.
b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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