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The supply manager at a dishwasher manufacturer is assessing if the company should purchase the...

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Accounting

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The supply manager at a dishwasher manufacturer is assessing if the company should purchase the pump from a supplier or assemble the pump in-house. Forecasts suggest that 31,000 pumps are needed per year. The annual fixed costs to assemble the pumps are $320,000 per year. The variable costs per unit to assemble the pump are $30/ unit. The pumps can be purchased for $39/unit. a. Compute the total annual cost for insourcing and outsourcing the pumps. b. Which option would you prefer? Outsource Insource

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