Olympic Products Inc. manufactures and distributes barbecue grills. Olympic normal sales units per month is: 1200 and normal sales price per unit is: $140
| Problem 3 (10 points) | ||||||||||||
| Olympic Products Inc. manufactures and distributes barbecue grills. | ||||||||||||
| Olympic normal sales units per month is: | 1200 | and normal sales price per unit is: | $140 | |||||||||
| The material cost per grill is: | $47 | and the direct labor per gill is: | $20 | |||||||||
| The variable overhead cost per grill is: | $15 | and the fixed overhead cost per month is: | $32,500 | |||||||||
| A contract manufacturer has approached Olympic and offered to supply the grills ready to sell for a unit cost of: | $88 | |||||||||||
| Olympic’s management believes that if it accepts this offer, Olympic will be able to lease unused factory space for a monthly rent of: | $11,000 | |||||||||||
| Direction: Perform a make-versus-buy analysis and explain your conclusion at the end. | ||||||||||||
| Answer Sheet: | ||||||||||||
| Olympic Products Inc. | ||||||||||||
| Make vs Buy Analysis | ||||||||||||
| Make | Buy | Difference | ||||||||||
| Your conclusion: |
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