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HT Dentistry operates in a large metropolitan area. Currently, HT has its own dental laboratory to produce porcelain and gold crowns. The unit costs to produce the crowns are as follows:

Fixed overhead is detailed as follows:

Salary (supervisor)	$26,000
Depreciation	5,000
Rent (lab facility)	32,000

Overhead is applied on the basis of direct labor hours. These rates were computed by using 5,500 direct labor hours.

A local dental laboratory has offered to supply HT all the crowns it needs. Its price is $125 for porcelain crowns and $150 for gold crowns; however, the offer is conditional on supplying both types of crownsit will not supply just one type for the price indicated. If the offer is accepted, the equipment used by HT laboratory would be scrapped (it is old and has no market value), and the lab facility would be closed. HT uses 2,000 porcelain crowns and 600 gold crowns per year.

Required:

Should HT continue to make its own crowns, or should they be purchased from the external supplier? What is the dollar effect of purchasing?

What qualitative factors should HT consider in making this decision?

Suppose that the lab facility is owned rather than rented and that the $32,000 is depreciation rather than rent. What effect does this have on the analysis in Requirement 1?

Refer to the original data. Assume that the volume of crowns used is 4,200 porcelain and 600 gold. Should HT make or buy the crowns? Explain the outcome.

1. How do you incorporate the "Make" or "Buy" decisions (quantitative and qualitative factors) in your life? (Let me give you an example, you decide whether to cook or to cater for your next birthday party that you will invite me over.:). What are some of your decision factors

What qualitative factors should HT consider in making this decision?

Suppose that the lab facility is owned rather than rented and that the $32,000 is depreciation rather than rent. What effect does this have on the analysis in Requirement 1?

Refer to the original data. Assume that the volume of crowns used is 4,200 porcelain and 600 gold. Should HT make or buy the crowns? Explain the outcome.

1. Should HT continue to make it own crown, or should they be purchased from the external supplier? What is the dollar effect of purchasing?
2. What qualitative factors should HT consider in making this decision
3. Suppose that the lab facility is owned rather than rented and the $ 32,000 is depreciation rather than rent. What effect does this have on the analysis in Requirement 1
4. Refer to the original data. Assume that the volume of browns used is 4,200 porcelain and 600 gold. Should HT make or buy the crowns Explain outcome
5. can you help

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