Professor: Sarah Engle
Course Project: Cost Analysis for Decision Making The Liquid Chemical Company
April 19, 2013
There are four alternatives Mr. Walsh that available to the Liquid Chemical Co. to pursue. The first alternative (Alternative A) is the status quo where Liquid Chemical will continue making the containers and performing maintenance.
|Relevant cost |Alternative A | |Purchase cost of GHL |$144,000 | |Other material cost |$500,000 | |Salary(supervisors) |$50,000 | |Labor (workers) |$450,000 | |Warehouse rent |$85,000 | |Maintenance of machinery |$36,000 | |Other expenses |$157,500 | |Salary (managers) |$80,000 | |Severance cost | | |Pension Expense | |
The second alternative (Alternative B) is for Liquid Chemical Co. to continue making the containers, but it will outsource...