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    Hospital Suply inc-GroupC1

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    Anula
    The document contains financial information for Hospital Supply Inc.'s in-house production and outsourcing options. It analyzes revenue, costs, contribution, profits for producing 3000 units in-house. It then considers outsourcing 1000 units at a price of $2,475 per unit and producing 2000 units in-house. This would decrease profit by $31,000 so the outsourcing price is unacceptable. Another option presented is 2800 units in-house and 1000 outsourced at $2,475 per unit, which is acceptable as it is lower than Hospital Supply's maximum price of $2,950 per unit.

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    Hospital Suply inc-GroupC1

    Uploaded by

    Anula
    22 views5 pages
    The document contains financial information for Hospital Supply Inc.'s in-house production and outsourcing options. It analyzes revenue, costs, contribution, profits for producing 3000 units in-house. It then considers outsourcing 1000 units at a price of $2,475 per unit and producing 2000 units in-house. This would decrease profit by $31,000 so the outsourcing price is unacceptable. Another option presented is 2800 units in-house and 1000 outsourced at $2,475 per unit, which is acceptable as it is lower than Hospital Supply's maximum price of $2,950 per unit.

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    hospital suply inc-GroupC1.xlsx

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    The document contains financial information for Hospital Supply Inc.'s in-house production and outsourcing options. It analyzes revenue, costs, contribution, profits for producing 3000 units in-house. It then considers outsourcing 1000 units at a price of $2,475 per unit and producing 2000 units in-house. This would decrease profit by $31,000 so the outsourcing price is unacceptable. Another option presented is 2800 units in-house and 1000 outsourced at $2,475 per unit, which is acceptable as it is lower than Hospital Supply's maximum price of $2,950 per unit.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    22 views5 pages

    Hospital Suply inc-GroupC1

    Uploaded by

    Anula
    The document contains financial information for Hospital Supply Inc.'s in-house production and outsourcing options. It analyzes revenue, costs, contribution, profits for producing 3000 units in-house. It then considers outsourcing 1000 units at a price of $2,475 per unit and producing 2000 units in-house. This would decrease profit by $31,000 so the outsourcing price is unacceptable. Another option presented is 2800 units in-house and 1000 outsourced at $2,475 per unit, which is acceptable as it is lower than Hospital Supply's maximum price of $2,950 per unit.

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    HOSPITAL SUPPLY, INC.

    (GROUP C1)
    Part 6
    Particulars All In house Production

    Revenue $ 13,050,000
    (-)Variable Manufacturing Costs $ 5,385,000
    (-)Variable Marketing Costs $ 825,000
    Contribution $ 6,840,000
    (-)Fixed Manufacturing Overheads $ 1,980,000
    (-)Fixed Marketing Costs $ 2,310,000

    Profit $ 2,550,000

    Maximum Amount willing to pay the contractor

    Maximum per unit price


    Price quoted by contractor

    Since the price quoted by the contractor is higher than the maximum price we are willing to pay, therefore $2,475 is
    as it would decrease our income by ---> $ (31,000)

    Part 7
    Particulars All In house Production
    (3000u)

    Revenue $ 13,050,000
    (-)Variable Manufacturing Costs $ 5,385,000
    (-)Variable Marketing Costs $ 825,000
    Contribution $ 6,840,000
    (-)Fixed Manufacturing Overheads $ 1,980,000
    (-)Fixed Marketing Costs $ 2,310,000

    Profit $ 2,550,000

    Maximum Amount willing to pay the contractor

    Maximum per unit price


    Price quoted by contractor
    Since the price quoted by the contractor is lower than the maximum price we are willing to pay, therefore $2,475 is a
    1000 Units Contracted and 2000 Produced In House

    $ 13,050,000
    $ 3,590,000
    $ 770,000
    $ 8,690,000
    $ 1,386,000
    $ 2,310,000

    $ 4,994,000

    $ 2,444,000

    $ 2,444
    $ 2,475

    e we are willing to pay, therefore $2,475 is unacceptable

    2800 units produced and 1000 units outsourced


    Regular In House(2000u) Regular Outsourced(1000u) Modified In House (800u)

    $ 8,700,000 $ 4,350,000 $ 3,960,000


    $ 3,590,000 $ 2,420,000
    $ 550,000 $ 220,000 $ 440,000
    $ 4,560,000 $ 4,130,000 $ 1,100,000

    $ 2,950,000

    $ 2,950
    $ 2,475
    e we are willing to pay, therefore $2,475 is acceptable.
    Total

    $ 17,010,000
    $ 6,010,000
    $ 1,210,000
    $ 9,790,000
    $ 1,980,000
    $ 2,310,000

    $ 5,500,000

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