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# Should ACE continue to manufacture Product A or purchase Pro

ACE Corporations incurs a \$9 per unit cost for Product A, which it currently manufactures and sells for \$13.50 per unit. Instead of manufacturing and selling this product, ACE can purchase Product B for \$5 per unit and sell it for \$12 per unit. If it does so, unit sales would remain unchanged and \$5 of the \$9 per unit costs assigned to Product A would be eliminated. Should the company continue to manufacture Product A or purchase Product B for resale?

Explain each calculation and defend the choice made.

#### Solution Preview

ACE Corporations incurs a \$9 per unit cost for Product A, which it currently manufactures and sells for \$13.50 per unit. Instead of manufacturing and selling this product, ACE can purchase Product B for \$5 per unit and sell it for \$12 per unit. If it does so, unit sales would remain unchanged and \$5 of the \$9 per unit costs assigned ...

#### Solution Summary

This solution is comprised of a detailed explanation to answer should the company continue to manufacture Product A or purchase Product B for resale.

\$2.19