Académique Documents
Professionnel Documents
Culture Documents
10
GORDON ENGINEERING COMPANY
3rd
Term
2014
COM
3rd
Term
2014
Trade-in Equipment
$
6,600.00
In view of the above table, we can see the price of the grinder is much
lower because of the trade in equipment. Based on this I will not recommend
this new grinder because it is an additional cost together with this there is also
a freight cost of $1.00 per table each way.
6. These are typical make or buy decisions. Prepare a make or buy policy
statement, a standard procedure and an analysis from to guide the
company in such decisions.
A(Special Tool in
grinding)
Fixed cost
Direct Labor
Wheel Wear
Coolants and Miscellaneous
Cost
Overhead (150% of the
direct labor)
Transportation Cost
Equipment Cost
Price of the grinder
Trade-in Equipment
New Price of the grinder
B(Buying the
Grinder)
1.08
2.5
2
0.6
1.62
3.75
0.12
0.1
1400
18000
-6600
11400
1402.82
22808.95
Based on the table above we can see that adding a special grinding
will be sufficient to suffice their requirements.
COM