Teich Inc. is considering whether to continue to make a component or to buy it...
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Teich Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 15,000 of the components each year. The unit product cost of the component is given as follows: Direct materials, direct labor, and the variable manufacturing overhead costs are all variable costs of producing the components. Of the fixed manufacturing overhead, 10% is immediately avoidable if the component were bought from the outside supplier; the remainder is not avoidable. In addition, production of the component uses 3 minutes on a machine that is the company's current constraint (bottleneck). If the component were bought from the external supplier, this machine time would be freed up for use on another product that requires 6 minutes per unit on the constraining machine and has a contribution margin of $8.10 per unit. What is the maximum per unit price Teich Inc. would be willing to pay the outside supplier for the 15,000 components. (Notes: Be sure to enter the per unit price, not the total price for all 15,000 units. Round your answer to the nearest cent.) Presented below are condensed data from the 2020 and 2021 Alexis Hardware Corporation's income statements: Revenues2020$15,0602021$12,260 Operating Income $5,400$4,140 Use the data above to construct a basic Cost-Volume-Profit model. What does the model predict operating income would be if revenues were $15,000 ? (Note: Round your answer to the nearest dollar.)
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Teich Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 15,000 of the components each year. The unit product cost of the component is given as follows: Direct materials, direct labor, and the variable manufacturing overhead costs are all variable costs of producing the components. Of the fixed manufacturing overhead, 10% is immediately avoidable if the component were bought from the outside supplier; the remainder is not avoidable. In addition, production of the component uses 3 minutes on a machine that is the company's current constraint (bottleneck). If the component were bought from the external supplier, this machine time would be freed up for use on another product that requires 6 minutes per unit on the constraining machine and has a contribution margin of $8.10 per unit. What is the maximum per unit price Teich Inc. would be willing to pay the outside supplier for the 15,000 components. (Notes: Be sure to enter the per unit price, not the total price for all 15,000 units. Round your answer to the nearest cent.) Presented below are condensed data from the 2020 and 2021 Alexis Hardware Corporation's income statements: Revenues2020$15,0602021$12,260 Operating Income $5,400$4,140 Use the data above to construct a basic Cost-Volume-Profit model. What does the model predict operating income would be if revenues were $15,000 ? (Note: Round your answer to the nearest dollar.) 