Ask Question
4 October, 22:06

Saran Company has contacted Crane with an offer to sell it 5,100 of the wickets for $16 each. If Crane makes the wickets, variable costs are $14 per unit. Fixed costs are $8 per unit; however, $5 per unit is unavoidable. Should Crane make or buy the wickets?

+5
Answers (1)
  1. 5 October, 00:49
    0
    Answer:Crane should buy the wicket as it result in saving of $ 1100

    Explanation:

    Given:

    Quantity = 5,100

    Price = $16

    Variable cost = $14 per unit

    Fixed costs = $8 per unit

    Buying Cost = 5100 * 16 = $ 81,600

    Making Cost = Variable Costs + Avoidable Fixed Costs

    Making Cost = 14 * 5100 + (8 - 5) * 5100 = $ 86,700

    Crane should buy the wicket as it result in saving of $ 1100 ($86,700 - $81,600).
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Saran Company has contacted Crane with an offer to sell it 5,100 of the wickets for $16 each. If Crane makes the wickets, variable costs ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers