Question
Bao Company currently makes all the components for its custom made bathroom sinks: the cabinets, the sink top, and the faucet. However, Bao Company is
Bao Company currently makes all the components for its custom made bathroom sinks: the cabinets, the sink top, and the faucet. However, Bao Company is considering buying the sink top for $30 from a supplier to save some money on production costs. Below are the costs to make the sink top:
Direct Materials: 10
Direct Labor: 12
Variable Overhead: 2
Fixed Overhead: 19
Of the fixed overhead, 91% are common costs such as rent on the factory, utilities, etc. that will continue whether Bao Company makes the sink tp or not. What is the total differential cost per unit to keep MAKING the sink top? (Round to one decimal place)
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