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MBA, Ph.D in Management
Harvard university
Feb-1997 - Aug-2003
Professor
Strayer University
Jan-2007 - Present
Question:Hello,
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The question is regarding Make or Buy.
The scenario is,
" I need to know whether we should continue to producing the video cameras or should we let CameraCO make it for us. I have put the details of their offer on the next page, along with the costing from our in-house video camera production manager for how much it currently costs us to produce. Have a look at all the costings"
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Furthermore, an explanation of make or buy
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The Figures:
Video Camera Costs ( 60000 Units)
Direct Material $8,300,000
Direct Labour $3,500,000
General And Administrative expenses $1,700,000
Fixed Manufacturing overhead $2,500,000
Variable Manufacturing Overhead $3,500,000
Total Costs $19,500,000
Per Unit Costs $325
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CameraCO Offer ( 60000 Units):
Per Unit $255
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