90.2K

Verified Solution

Link Copied!

The Sunbeam Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information about the costs of making CMCBs in 2020 and the expected costs in I: Data table (Click the icon to view the costs.) Requirement 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2021. Requirements More info 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2021. 2. Suppose the capacity currently used to make CMCBs will become idle if Sunbeam purchases CMCBs from Maverick. On the basis of financial considerations alone, should Sunbeam make CMCBs or buy them from Maverick? Show your calculations. 3. Now suppose that if Sunbeam purchases CMCBs from Maverick, its best alternative use of the capacity currently used for CMCBs is to make and sell special circuit boards (CB3s) to the Eleanor Corporation. Sunbeam estimates the following incremental revenues and costs from CB3s: Total expected incremental future revenues $2,700,000 Total expected incremental future costs $2,875,000 On the basis of financial considerations alone, should Sunbeam make CMCBs or buy them from Maverick? Show your calculations. Sunbeam manufactured 6,000 CMCBs in 2020 in 30 batches of 200 each. In 2021, Sunbeam anticipates needing 17,000 CMCBs. The CMCBs would be produced in 100 batches of 170 each. The Maverick Corporation has approached Sunbeam about supplying CMCBs to Sunbeam in 2021 at $390 per CMCB on whatever delivery schedule Sunbeam wants

Answer & Explanation Solved by verified expert

See Answer