Sycamore Company uses a certain part in its manufacturing process that it buys from an outside supplier for $38 per part plus another $4 for
shipping and other purchasing-related costs. The company will need 29100 of these parts in the next year and is considering making the part
internally. After performing a capacity analysis Sycamore determined that it has sufficient unused capacity to manufacture the 29100 parts
but would need to hire a manager at an annual salary of $58200 to oversee this production activity. Estimated production costs are determined
to be:

43

rev: 05-11-2011
Should Sycamore produce the part or continue to buy it from the outside supplier?

rev: 05-11-2011 eBook Links (2)references
5. value:
1.50 points
What are the other factors that Sycamore Company should consider in deciding to make the part internally?
(Select all that apply.)
v: 05-11-2011
The potential for improved control over the availability of the parts by having it when
needed and the potential for improved quality of the parts.

Since Sycamore Company is considering the use of currently available capacity it should
evaluate any relevant opportunity costs of using this capacity for more profitable
activities