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Benitez Company currently outsources a relay switch that is a component in one of its products. The switches cost $21 each. The company is considering
Benitez Company currently outsources a relay switch that is a component in one of its products. The switches cost $21 each. The company is considering making the switches internally at the following projected annual production costs: Unitlevel material cost $ 4 Unitlevel labor cost $ 3 Unitlevel overhead $ 2 Batchlevel setup cost (6,000 units per batch) $26,000 Productlevel supervisory salaries $38,000 Allocated facilitylevel costs $21,000 The company expects an annual need for 6,000 switches. If the company makes the product, it will have to utilize factory space currently being leased to another company for $1,600 a month. If the company decides to make the parts, total costs will be
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