QS 23-5 (Static) Make or buy LO P1 Kando Company currently pays $7 per unit to buy a part for a product it manufactures.

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Qs 23 5 Static Make Or Buy Lo P1 Kando Company Currently Pays 7 Per Unit To Buy A Part For A Product It Manufactures 1 (21.43 KiB) Viewed 56 times

QS 23-5 (Static) Make or buy LO P1 Kando Company currently pays $7 per unit to buy a part for a product it manufactures. Instead, Kando could make the part for per unit costs of $3 for direct materials, $2 for direct labor, and $1 for incremental overhead. Kando normally applies overhead costs using a predetermined rate of 200% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (b) Should Kando make or buy the part? Direct materials Direct labor Overhead Cost to buy Cost per unit Company should Make Buy