The Svenson Corporation manufactures cellular modems. It manufactures its own cellutar modem circuit boards (CMCB),...
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The Svenson Corporation manufactures cellular modems. It manufactures its own cellutar modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information about the costs of making CMCBs in 2020 and the expected costs in 2021 : (1) (Click the icon to view the make-versus-buy information.) Read the coqurements. (Click the icon to view the cosis.) Requirement 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2021. Data table Fixed manufacturing overhead costs of plant depreciation, insurance, and administration that cannot be avoided even if CMCBs are not made 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2021. 2. Suppose the capacity currently used to make CMCBs will become idle if Svenson purchases CMCBs from Minton. On the basis of financial considerations alone, should Svenson make CMCBs or buy them from Minton? Show your calculations. 3. Now suppose that if Svenson purchases CMCBs from Minton, its best alternative use of the capacity currently used for CMCBs is to make and sell special circuit boards (CB3s) to the Essex Corporation. Svenson estimates the following incremental revenues and costs from CB3s: On the basis of financial considerations alone, should Svenson make CMCBs or buy them from Minton? Show your calculations
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