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Austin LTD. Manufactures a component that is used in the fans it produces. A supplier has offered to supply the component for $25 per part.
Austin LTD. Manufactures a component that is used in the fans it produces. A supplier has offered to supply the component for $25 per part. The annual requirements of Austin are 20,00o components. Austin?s cost detail of manufacturing component is as follows: It was determined that the special equipment has no resale value and cannot be used for another process. The factory overhead is an allocation and would be unaffected by the decision. The costs above are based on the same 20.000 units that the supplier would supply. Should Austin continue to manufacture the component or purchase it from the outside supplier? (Support your work with numbers for full credit.)
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