The Park Avenue Corporation currently makes a part required in its finished product. The company uses 2,116 units of this part annually. Park Avenue Corp has been approached by a vendor to provide this part for $13.04 each. The following cost information is provided Direct Materials per unit $6.34
Direct Labor per unit $7.30
Variable Factory Overhead per unit $2.50
Fixed Factory Overhead per unit $7.50
How much would Park Avenue Corporation save by having the vendor make the part, instead of making it themselves?

If the company buys the part, it will save $$6,559.6

Explanation:

Giving the following information:

Purchase price= $13.04

The company uses 2,116 units of this part annually.

Production:

Direct Materials per unit $6.34

Direct Labor per unit $7.30

Variable Factory Overhead per unit $2.50

We weren't provided with information regarding the fixed costs. I will assume that non of the fixed overhead costs are avoidable, therefore, they are irrelevant to the decision making process.

Buy:

Total cost= 2,116*13.04= $27,592.64

Production:

Total cost= 2,116*(6.34 + 7.3 + 2.5)= $34,152.24

If the company buys the part, it will save $$6,559.6

ans.

heterothermic organisms include those organisms that can switch between homeothermic (having body temperature higher than environment) and poikilothermic (having variation in internal body temperature) strategies.

some migratory birds show heterothermy as they decrease their metabolic rate during cold nights to keep their body temperature low. drop in metabolic rate allows increase in production efficiency of birds that reduces the internal body temperature to make it equal to external cold temperature during cold nights.

thus, the correct answer is 'birds allow their temperature drop in order to increase their production efficiency.'

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