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3- Micro Devices Division
Assume that the data in case Exhibit 8 (see first tab of Excel doc) are MDD’s budget for the coming year, and that all other information in the case and the preparation document holds unless stated explicitly otherwise in this problem.
The table below contains information about Product SCM-DUN. These data are also in the “MDD Data” tab of the Exam Data spreadsheet.
A. 10 Points
Prepare an estimate of the reported unit cost of Product SCM-DUN if MDD were to make Product SCM-DUN in its production facility.
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3- Micro Devices Division
Assume that the data in case Exhibit 8 (see first tab of Excel doc) are MDD’s budget for the coming year, and that all other information in the case and the preparation document holds unless stated explicitly otherwise in this problem.
The table below contains information about Product SCM-DUN. These data are also in the “MDD Data” tab of the Exam Data spreadsheet.
A. 10 Points
Prepare an estimate of the reported unit cost of Product SCM-DUN if MDD were to make Product SCM-DUN in its production facility. Describe the steps you take and justify any choices you make.
You may use (citing appropriately) values from the in-class analysis of the case, and from the follow-up assignment analysis, without providing the underlying calculations.
B. 20 Points
The Handheld Products division of Chips ‘R’ Us (MDD’s parent company) currently purchases 500,000 units (die) of Product SCM-DUN from Integrated Corporation, a third-party producer of high-volume chips. Handheld Products pays Integrated Corporation $33.00 per unit of Product SCM-DUN.
Assume (1) a marginal corporate tax rate of 25%, (2) a five-year window before MDD’s new product pipeline leads to a production plan with overall utilization at 80% without Product SCM-DUN, and (3) a 7% cost of corporate capital.
Prepare a one-page memo to the MDD Executive Committee regarding whether MDD should insource Product SCM-DUN for the next several years.
NOTE: Assume that MDD can handle this volume of Product SCM-DUN without approaching 80% utilization.
** SEE ANSWER FORMAT ON PAGE 3
3 – Micro Devices [30 Points]
A. 10 points
Reported Unit Cost of Product SCM-DUN
Explanation and calculation(s):
3 – Micro Devices
B. 20 points
Date: Today
To: Micro Devices Division Executive Committee
From:
Re: Insourcing Product SCM-DUN
Executive Summary
Supporting Analysis
4 – MS/SCM Pictures
Assume you are the CEO of a MS/SCM Pictures, a small, publicly traded movie production company….
3- Micro Devices Division
Assume that the data in case Exhibit 8 (see first tab of Excel doc) are MDD’s budget for the coming year, and that all other information in the case and the preparation document holds unless stated explicitly otherwise in this problem.
The table below contains information about Product SCM-DUN. These data are also in the “MDD Data” tab of the Exam Data spreadsheet.
A. 10 Points
Prepare an estimate of the reported unit cost of Product SCM-DUN if MDD were to make Product SCM-DUN in its production facility. Describe the steps you take and justify any choices you make.
You may use (citing appropriately) values from the in-class analysis of the case, and from the follow-up assignment analysis, without providing the underlying calculations.
B. 20 Points
The Handheld Products division of Chips ‘R’ Us (MDD’s parent company) currently purchases 500,000 units (die) of Product SCM-DUN from Integrated Corporation, a third-party producer of high-volume chips. Handheld Products pays Integrated Corporation $33.00 per unit of Product SCM-DUN.
Assume (1) a marginal corporate tax rate of 25%, (2) a five-year window before MDD’s new product pipeline leads to a production plan with overall utilization at 80% without Product SCM-DUN, and (3) a 7% cost of corporate capital.
Prepare a one-page memo to the MDD Executive Committee regarding whether MDD should insource Product SCM-DUN for the next several years.
NOTE: Assume that MDD can handle this volume of Product SCM-DUN without approaching 80% utilization.
** SEE ANSWER FORMAT ON PAGE 3
3 – Micro Devices [30 Points]
A. 10 points
Reported Unit Cost of Product SCM-DUN
Explanation and calculation(s):
3 – Micro Devices
B. 20 points
Date: Today
To: Micro Devices Division Executive Committee
From:
Re: Insourcing Product SCM-DUN
Executive Summary
Supporting Analysis
4 – MS/SCM Pictures
Assume you are the CEO of a MS/SCM Pictures, a small, publicly traded movie production company….
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