Black Eagle Co needs 20,000 units of Part MZ to use in producing one of its products. If Black Eagle buys the Part MZ from Gomedov Co for $79 instead of making it, Black Eagle will not use the released facilities in another manufacturing activity. Twenty percent of the fixed overhead will continue irrespective of CEO Norman Wesley’s decision. Table Attached Required Explain which alternative is more attractive to Black Eagle, make or buy Part MZ Assume there is new information that Black Eagle is negotiating to purchase cheaper raw materials from supplier (20% lower price). Is this information relevant or irrelevant? (On the basis of financial considerations alone, should Black Eagle make or buy Part MZ? Show your calculations What are relevant qualitative factors that Black Eagle should consider to decide whether to make or buy Part MZ? (at least one factor for each decision [Make or Buy)
Black Eagle Co needs 20,000 units of Part MZ to use in producing one of its products. If Black Eagle buys the Part MZ from Gomedov Co for $79 instead of making it, Black Eagle will not use the released facilities in another manufacturing activity. Twenty percent of the fixed overhead will continue irrespective of CEO Norman Wesley’s decision. Table Attached Required Explain which alternative is more attractive to Black Eagle, make or buy Part MZ Assume there is new information that Black Eagle is negotiating to purchase cheaper raw materials from supplier (20% lower price). Is this information relevant or irrelevant? (On the basis of financial considerations alone, should Black Eagle make or buy Part MZ? Show your calculations What are relevant qualitative factors that Black Eagle should consider to decide whether to make or buy Part MZ? (at least one factor for each decision [Make or Buy)
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 8PB: Adam Inc.s records for May include the following information: A. What are Adams standard labor hours...
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Black Eagle Co needs 20,000 units of Part MZ to use in producing one of its products. If Black Eagle buys the Part MZ from Gomedov Co for $79 instead of making it, Black Eagle will not use the released facilities in another manufacturing activity. Twenty percent of the fixed overhead will continue irrespective of CEO Norman Wesley’s decision.
Table Attached
Required
- Explain which alternative is more attractive to Black Eagle, make or buy Part MZ
- Assume there is new information that Black Eagle is negotiating to purchase cheaper raw materials from supplier (20% lower price). Is this information relevant or irrelevant? (On the basis of financial considerations alone, should Black Eagle make or buy Part MZ? Show your calculations
- What are relevant qualitative factors that Black Eagle should consider to decide whether to make or buy Part MZ? (at least one factor for each decision [Make or Buy)
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