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BoraBora Inc. produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a
BoraBora Inc. produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 6,300 units, are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost The fixed overhead costs are unavoidable. $4.30 $4.10 $3.50 $1.10 $13.00 Maldives Company has offered to sell 6,300 units of the same part to Bora Bora Inc. for $14.00 per unit. Assuming the company has no other use for its facilities, what should Bora Bora Inc. do? A. Buy from Suri and save $1.00 per unit. B. Make the part and save $10.80 per unit. C. Make the part and save $2.10 per unit. D. Make the part and save $6.70 per unit
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