Reflect on how you could start a small online venture to make a little extra money. What fixed and variable costs would be involved in such a venture? Use this example if you like or use one of your own.
DUCKS 'R' US- Duckling breeder for the farmer, lifestyle block owners & lovers of animals.
FIXED COSTS
- Male duck $25
- Female duck $25
- Duck coup/cage $250
- Straw/bedding $55 per bale
- Heat Lamps $20
- Food $25 per 20kg
- PC- $1100 Apple Mac
- Advertising $100 Ebay/Gumtree/Farmertrade
TOTAL FIXED COSTS $1600
VARIABLE COSTS
- Transport boxes $20
- Shipping & Handling $26
- Duckling food $25per 20kg
- Bigger coup for extra space due to varying number of ducklings $150
TOTAL VARIABLE COSTS $221
Make or buy decisions
A subcontractor has offered to supply units, shafts, wheels, handles and buttons for $12, $21, $10 and $14, respectively.Decide whether Open Manufacturing should make or buy the components?
They should manufacture the units them selves. More cost effective per unit. Open manufacturing costs are $14, $17, $8, $12 (per unit) compared to the table
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