Exercise 23-1 (Static) Make or buy LO P1 Beto Company pays $2.50 per unit to buy a part for one of the products it manuf

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Exercise 23 1 Static Make Or Buy Lo P1 Beto Company Pays 2 50 Per Unit To Buy A Part For One Of The Products It Manuf 1 (31.16 KiB) Viewed 56 times

Exercise 23-1 (Static) Make or buy LO P1 Beto Company pays $2.50 per unit to buy a part for one of the products it manufactures. With excess capacity, the company is considering making the part. Making the part would cost $1.20 per unit for direct materials and $1.00 per unit for direct labor. The company normally applies overhead at the predetermined rate of 200% of direct labor cost. Incremental overhead to make the part would be 80% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Beto make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy