The cost to Swank Company of manufacturing 15,000 units of a particular part is $135,000, of which $60,000 is fixed and
Posted: Sun Jul 03, 2022 3:52 pm
The cost to Swank Company of manufacturing 15,000 units of aparticular part is $135,000, of which $60,000 is fixed and $75,000is variable. The company can buy the part from an outside supplierfor $6 per unit. Fixed costs will remain the same regardless ofSwank's decision.
a. Prepare a comparative schedule showingthe total costs of this make or buy decision.
b. Assuming no alternative use for theplant facilities, should the company buy the part or continue tomanufacture it?
a. Prepare a comparative schedule showingthe total costs of this make or buy decision.
b. Assuming no alternative use for theplant facilities, should the company buy the part or continue tomanufacture it?