Outsource Tortillas Proposal: The company spent a total of $2,000,000 producing tortillas during the past year....

Outsource Tortillas Proposal: The company spent a total of $2,000,000 producing tortillas during the past year. The tortillas are made at a company owned facility. A vendor has offered to supply a similar quantity and grade of tortillas for $2,200,000. Staff recommends continuing to make tortillas because the proposed purchase price is 10% higher than the cost of making tortillas. Staff believes it is inappropriate to consider that the tortilla facility could be leased to another company for $350,000, if it is diverted from tortilla production. Perform a side by side comparison. On one side show the results of accepting the recommendation and on the other side show the rejection of the recommendation. Write up your approach to your analysis and your conclusion (your decision and why). Show all your work.

Expert Solution

ekkarill92 answered 2 years ago

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