Cost Analysis for Make-or-Buy Decision: Golden. Inc., has been manufacturing 5.000 units per month of part 10541, which is used in the manufacture of one of its products. At this level of production, the cost per unit of manufacturing part 10541 is as follows:

Brown Company has offered to sell Golden 5,000 units of part 10541 for $17 a unit. Golden has determined that it could use the facilities presently used to manufacture part 10541 to manufacture product RAC and generate an additional contribution margin per month of $8,000. Golden has also determined that one third of the fixed overhead applied will be saved even if part 10541 is purchased from Brown and product RAC is made.

Required: Prepare a schedule to show the effect of purchasing part 10541 from Brown at $17 a unit. Assume Golden would take the opportunity to make product RAC.

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Direct materials Direct labor Variable overhead Fixed overhead applied Total $ 2 2846 $20