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2) Summer Company manufactures a part for its production cycle. The costs per unit for 10,000 units of the part are as follows: Per Unit

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2) Summer Company manufactures a part for its production cycle. The costs per unit for 10,000 units of the part are as follows: Per Unit Direct materials $10.00 Direct labor 7.50 Variable factory overhead 8.00 Fixed factory overhead 5.00 Total costs $30.00 The fixed factory overhead costs are unavoidable. Spring Company has offered to sell 5,000 units of the same part to Summer Company for $27.5 per unit. Assuming no other use for the facilities, Summer Company should make the part to save $15,000 make the part to save $10.000 buy the part from Spring Company to save $10,000 buy the part from Spring Company to save $15,000 2) Summer Company manufactures a part for its production cycle. The costs per unit for 10,000 units of the part are as follows: Per Unit Direct materials $10.00 Direct labor 7.50 Variable factory overhead 8.00 Fixed factory overhead 5.00 Total costs $30.00 The fixed factory overhead costs are unavoidable. Spring Company has offered to sell 5,000 units of the same part to Summer Company for $27.5 per unit. Assuming no other use for the facilities, Summer Company should make the part to save $15,000 make the part to save $10.000 buy the part from Spring Company to save $10,000 buy the part from Spring Company to save $15,000

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