University Of North Texas Operations And Supply Chain Management Assignment Help - Make or buy
Question - The ski selected is a mass market ski with a special binding and will be sold for $80 per pair. A $125000 fixed charge will be absorbed by the ski, however, to allocate a fair share of the company's present fixed cost to the new product. Using the estimated sales and production of 10000 pair of skis as the expected volume, Direct labor $35 Direct material 30 Total overhead 15 Total cost $80 They discussed the purchasing of the binding from a subcontractor at $5.25 per binding, or $10.50 per pair with direct-labor and variable cost would be reduced by 10% and direct materials costs would be reduced by 20%. Should the Corporation make or buy the bindings? Show calculations to support answer.
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