Rundle Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,200 containers follows: Unit-level materials $ 6,000 Unit-level labor 6,400 Unit-level overhead 3,300 Product-level costs* 8,100 Allocated facility-level costs 27,500 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rundle for $2.60 each. Required Calculate the total relevant cost. Should Rundle continue to make the containers? Rundle could lease the space it currently uses in the manufacturing process. If leasing would produce $12,300 per month, calculate the total avoidable costs. Should Rundle continue to make the containers?

1.Total avoidable cost =$18,400

2.Purchasing price = $23,920

3.Total avoidable cost = $30,700

4. No.

Explanation:

As per the data given in the question,

(1).

Total avoidable cost:

Unit-level materials = $6,000

Unit-level labor = $6,400

Unit-level overhead = $3,300

Product-level cost = $8,100/3 = $2,700

Total avoidable cost = $6,000 + $6,400+ $3,300 + $2,700 = $18,400

(2).

Since cost of buying is more than production therefore Rundle Electronics should continue production

Purchase price = 9,200 × $2.6

=$23,920

(3)

if leasing produce $12,300 per month, than

Total avoidable cost = $12,300 + $18,400

= $30,700

(4)

No, It is better to purchase rather than production because purchasing price is less than production amount.

2 weeks ago lol enoy your dunce cap

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know