Please add the total cost to produce the assembly Stan Fawcett's company currently purchases a gear assembly from Salt Lake Supply, Inc., at $4.20 perunit with a minimum order of 3,000 units. Stan is considering instead producing the gear assemblyhimself. He estimates that producing it himself will cost $16,000 to set up the process and then $1.75 perunit for labor and materials.a) Using the line drawing tool, add the total cost graph for Stan to produce the assembly instead ofpurchasing from Salt Lake Supply, Total cost for the purchase option is already plotted. Properly labelyour line.Note: Carefully follow the instructions above and only draw the required object4840,00036,00032,00028,00024,000-20,00016,000-12,0008,000-4,00004.02,000Minimum Order4,000Quantity6,0008,000Q

In economics, the concept of total cost refers to the sum of all costs incurred in producing a…

a) Using the line drawing tool, add the total cost graph for Stan to produce the assembly instead of purchasing from Salt Lake Supply, Total cost for the purchase option is already plotted. Properly label your line. Note: Carefully follow the instructions above and only draw the required object

a) Using the line drawing tool, add the total cost graph for Stan to produce the assembly instead of purchasing from Salt Lake Supply, Total cost for the purchase option is already plotted. Properly label your line. Note: Carefully follow the instructions above and only draw the required object

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 9E

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Question

Please add the total cost to produce the assembly

Stan Fawcett's company currently purchases a gear assembly from Salt Lake Supply, Inc., at $4.20 per
unit with a minimum order of 3,000 units. Stan is considering instead producing the gear assembly
himself. He estimates that producing it himself will cost $16,000 to set up the process and then $1.75 per
unit for labor and materials.
a) Using the line drawing tool, add the total cost graph for Stan to produce the assembly instead of
purchasing from Salt Lake Supply, Total cost for the purchase option is already plotted. Properly label
your line.
Note: Carefully follow the instructions above and only draw the required object
4
8
40,000
36,000
32,000
28,000
24,000-
20,000
16,000-
12,000
8,000-
4,000
04
.0
2,000
Minimum Order
4,000
Quantity
6,000
8,000
Q

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Step 1: Introduce the concept of total cost.

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