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the manufacturing cost Roedel Electronics produces a variety of electrical components, including a remote control for televisions and a remote control for DVD players. Each remote control consists of three subassemblies that are manufactured by Roedel: a base, a cartridge, and a keypad. Both remote controls use the same base subassembly, but different cartridge and keypad subassemblies.

Roedel’s sales forecast indicates that 7000 TV remote controls and 5000 DVD remote controls will be needed to satisfy demand during the upcoming Christmas season. Because only 500 hours of in-house manufacturing time are available, Roedel is considering purchasing some, or all, of the subassemblies from outside suppliers. If Roedel manufactures a subassembly in-house, it incurs a fixed setup cost as well as a variable manufacturing cost. The following table shows the setup cost, the manufacturing time per subassembly, the manufacturing cost per subassembly, and the cost to purchase each of the subassemblies from an outside supplier:

Determine how many units of each subassembly Roedel should manufacture and how many units Roedel should purchase.

Variable names Value
No. of bases manufactured fill in the blank 1
No. of bases purchased fill in the blank 2
No. of TV cartridges made fill in the blank 3
No. of TV cartridges purchased fill in the blank 4
No. of DVD cartridge made fill in the blank 5
No. of DVD cartridge purchased fill in the blank 6
No. of TV keypads purchased fill in the blank 8
No. of DVD keypads purchased fill in the blank 10

What is the total manufacturing and purchase cost associated with your recommendation?

\$ fill in the blank 11

Suppose Roedel is considering purchasing new machinery to produce DVD cartridges. For the new machinery, the setup cost is \$3000; the manufacturing time is 2.5 minutes per cartridge, and the manufacturing cost is \$2.60 per cartridge. Assuming that the new machinery is purchased, determine how many units of each subassembly Roedel should manufacture and how many units of each subassembly Roedel should purchase.

Variable names Value
No. of bases manufactured fill in the blank 12
No. of bases purchased fill in the blank 13
No. of TV cartridges made fill in the blank 14
No. of TV cartridges purchased fill in the blank 15
No. of DVD cartridge made fill in the blank 16
No. of DVD cartridge purchased fill in the blank 17
No. of TV keypads purchased fill in the blank 19
No. of DVD keypads purchased fill in the blank 21

What is the total manufacturing and purchase cost associated with your recommendation?

\$ fill in the blank 22

Do you think the new machinery should be purchased?

Explain.

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