Question
A business is operating at 70% of capacity and is currently purchasing a part used in its manufacturing operations for $24 per unit. The
A business is operating at 70% of capacity and is currently purchasing a part used in its manufacturing operations for $24 per unit. The unit cost for the business to make the part is $36 (including fixed costs), and $20 (not including fixed costs. Hint: it is the variable cost per unit). If 15,000 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the change in profit from making the part rather than purchasing it? OA. $180,000 increase B. $60,000 decrease OC. $60,000 increase D. $180,000 decrease
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