Roedel Electronics produces tablet computer accessories, including integrated ke

Question

Roedel Electronics produces tablet computer accessories, including integrated keyboard tablet stands that connect a keyboard to a tablet device and hold the device at a preferred angle for easy viewing and typing. Roedel produces two different sizes of integrated keyboard tablet stands, small and large. Each size uses the same keyboard attachment, but the stand consists of two different pieces, a top flap and a vertical stand that differ by size. Thus, a completed integrated keyboard tablet stand consists of three subassemblies that are manufactured by Roedel: a keyboard, a top flap and a vertical stand. Roedel's sales forecast indicates that 7,000 small integrated keyboard tablet stands and 5,000 large integrated keyboard tablet stands 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: Manufacturing Subassembly Setup Cost ($) Time per Unit (min.) Cost per Unit ($) Purchase Cost per Unit ($) Keyboard 1,000 0.9 0.40 0.65 Small top flap 1,200 2.2 2.90 3.45 Large top flap 1,900 3.0 3.15 3.70 Small vertical stand 1,500 0.8 0.30 0.50 Large vertical stand 1,500 1.0 0.55 0.70 (a) Determine how many units of each subassembly Roedel should manufacture and how many units Roedel should purchase. Variable names Value No. of Keyboard manufactured No. of Keyboard purchased No. of Small top flap made No. of Small top flap purchased No. of Large top flap made No. of Large top flap cartridge purchased No. of Small vertical stand made No. of Small vertical stand purchased No. of Large vertical stand made No. of Large vertical stand purchased What is the total manufacturing and purchase cost associated with your recommendation? $ (b) Suppose Roedel is considering purchasing new machinery to produce large top flaps. For the new machinery, the setup cost is $3,000; the manufacturing time is 2.5 minutes per unit , and the manufacturing cost is $2.60 per unit. 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 Keyboard manufactured No. of Keyboard purchased No. of Small top flap made No. of Small top flap purchased No. of Large top flap made No. of Large top flap cartridge purchased No. of Small vertical stand made No. of Small vertical stand purchased No. of Large vertical stand made No. of Large vertical stand purchased What is the total manufacturing and purchase cost associated with your recommendation? $ Do you think the new machinery should be purchased? Explain. The input in the box below will not be graded, but may be reviewed and considered by your instructor.

Explanation / Answer

Table of Total Cost if manufactured

Subassembly

Manufacturing Cost Per unit Iunits in Demand Total Manufacturing cost Setup Cost ($) Total Cost (In house) Total Cost P.u Purchasing Cost P.unit Total Purchase cost

Keyboard 0.4 12000 4,800.00 1000 5,800.00 0.48 0.65 7,800.00

Small top flap 2.9 7000 20,300.00 1200 21,500.00 3.07 3.45 24,150.00

Small vertical stand 0.3 7000 2,100.00 1500 3,600.00 0.51 0.5 3,500.00

Large top flap 3.15 5000 15,750.00 1900 17,650.00 3.53 3.7 18,500.00

Large vertical stand 0.55 5000 2,750.00 1500 4,250.00 0.85 0.7 3,500.00

* The production cost is less as compared to purchasing from outside

Subassembly

Purchase Cost MF cost Time Required to produced the demand unitsMins 30000 Manufacturing Time per Unit (min.) Demand

Keyboard 7,800.00 5,800.00 10,800.00 0.9 12000

Small top flap 24,150.00 21,500.00 15,400.00 2.2 7000

Small vertical stand 3,500.00 3,600.00 5,600.00 0.8 7000

Large top flap 18,500.00 17,650.00 15,750.00 3.15 5000

Large vertical stand 3,500.00 4,250.00 2,750.00 0.55 5000

Note We will produce few units of Large top Flap

30000-10800-15400

3800 Mins Left

1206.349206 Units to be manufactured and balance(5000-1206) need to be purchased

3793.650794 Purchase units

Solution:

Manufactuing Cost Manufactuing Units Purchasing units Total Cost P.u Purchasing Cost P.unit MF COST Pruchasing cost

Keyboard 12,000.00 0 0.48 0.65 5,800.00 -

Small top flap 7,000.00 0 3.07 3.45 21,500.00 -

Small vertical stand 0 7000 0.51 0.5 - 3,500.00

Large top flap 1206 3794 3.53 3.7 4,257.18 14,037.80

Large vertical stand 0 5000 0.85 0.7 - 3,500.00

Total 31,557.18 21,037.80

Total Csot of Manufactuing = $31557.18

Purchasing cost = $21,037.80

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