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(9 pts) 5. BAM Inc. has been manufacturing 10,000 units of part CJ5 per month, which is used in manufacturing one of its products. At
(9 pts) 5. BAM Inc. has been manufacturing 10,000 units of part CJ5 per month, which is used in manufacturing one of its products. At this level of production, the cost per unit to manufacture part CJ5 follows: Direct materials Direct labor Variable overhead Fixed overhead Total $10.00 25.00 5.00 10.00 $50.00 Butler Company has offered the sell BAM 10,000 units of part CJ5 for $45 a unit. BAM has determined that it could use the facilities presently used to manufacture part CJ5 to manufacture another product, which would generate an additional contribution margin per month of $80,000. BAM also has determined that 50 percent of the fixed overhead will be incurred even if it purchases part CJ5 from Butler and makes the other product. Required: Determine whether or not BAM should purchase from Butler. Assume that BAM would take the opportunity to make the other product
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