Gecko Company is deciding between using a supplier and making the wheels for its skateboards internally. Currently, the manufactured wheels have a variable unit cost of $2. The monthly fixed cost is $16,000, but 25% of it can be eliminated if wheels are no longer produced. A supplier has offered to produce the wheel at $3 per wheel and can produce 3,200 wheels for the 800 skateboards needed monthly. Should Gecko outsource wheels production or make them internally?

Lipman auto parts, a family-owned auto parts store, began january with $10,300.00 in cash. management forecasts that collections from credit customers will be $11,400.00 in january and $14,800.00 in february. the store is scheduled to receive $5,000.00 in cash on a business note receivable in january. projected cash payments include inventory purchases ($13,000.00 in january and $13,600.00 in february) and operating expenses ($2,700.00 each month). lipman auto parts' bank requires a $10,000.00 minimum balance in the store's checking account. at the end of any month when the account balance dips below $10,000.00, the bank automatically extends credit to the store in multiples of $1,000.00. lipman auto parts borrows as little as possible and pays back loans in quarterly installments of $2,000.00, plus 4 percent interest on the entire unpaid principal. the first payment occurs three months after the loan.