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Bancroft currently manufactures a subcomponent that is used in its main product. A supplier has offered to supply all the subcomponents needed at a
Bancroft currently manufactures a subcomponent that is used in its main product. A supplier has offered to supply all the subcomponents needed at a price of $121. Bancroft currently produces 20,400 subcomponents at the following manufacturing costs: Per unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit cost $44- 30 39 19 $132 a. If Bancroft has no alternative uses for the manufacturing capacity, what would be the profit impact of buying the subcomponents from the supplier? Less Profit 163,200 b. If Bancroft has no alternative uses for the manufacturing capacity, what would be the maximum price per unit they would be willing to pay the supplier? Maximum Price $ 113 per units
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