Assignment-2

Alpha Company is producing 2000 units which is going to be used in its final product.

The cost associated in manufacturing these parts were as follows:

Direct Material	$ 120000
Direct labor	30000
O-H Variable	90000
O-H Fixed	60000

A supplier has offered to supply these parts for $ 130 per unit, Do you recommend buying these parts knowing that the avoidable O.H Fixed cost is 30%. use differential analysis to support your answer