QUESTION65. SIEGEAUTO
produces seats for the automotive industry. It produces 10,000 units of the Seat
(A) which has a variable unit cost of €150. The fixed production costs made up
of the management of the plant are €200,000. The purchasing department assumes
that, as this product is not strategic, the manufacture of the seat (A) may be
outsourced to a subcontractor who offered to sell it to SIEGEAUTO at €160 per
unit. Should SIEGEAUTO stop producing Seat (A) in-house?

Question

QUESTION65. SIEGEAUTO
produces seats for the automotive industry. It produces 10,000 units of the Seat
(A) which has a variable unit cost of €150. The fixed production costs made up
of the management of the plant are €200,000. The purchasing department assumes
that, as this product is not strategic, the manufacture of the seat (A) may be
outsourced to a subcontractor who offered to sell it to SIEGEAUTO at €160 per
unit.  Should SIEGEAUTO stop producing Seat (A) in-house?

Answer

The company
must not outsource Seat (A) because it would lose €100,000

Answer

The company must stop
producing in-house and outsource Seat (A) because it is cheaper

Answer

We lack information to
answer.

Answer

The company must not
outsource Seat (A) because it would lose €50,000

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QUESTION65. SIEGEAUTO produces seats for the automotive industry. It produces 1...

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