Question
3...ThePronghornCompany manufactures5,000units of a part that could be purchased from an outside supplier for $14each.Pronghorn's costs to manufacture each part are as follows: Direct materials
3...ThePronghornCompany manufactures5,000units of a part that could be purchased from an outside supplier for $14each.Pronghorn's costs to manufacture each part are as follows:
Direct materials $3
Direct labor 2
Variable manufacturing overhead 5
Fixed manufacturing overhead 9
Total $19
All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses.
(a)Calculate relevant cost to make. ____________per unit
(c) If Pronghorn could lease the manufacturing facilities to another company for $25,000 per year, what would be the net total cost to outsource production of the part?
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