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Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent: Direct materials $8,400 (total for all 10,000 parts) Direct labor 11,250 Variable
Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent: Direct materials $8,400 (total for all 10,000 parts) Direct labor 11,250 Variable overhead 12,600 Traceable fixed overhead 2,000 Allocated fixed costs 14,200 An outside supplier has offered to sell Clemente the subcomponent for $3.60 a unit If Clemente accepts the order, the traceable fixed costs could be eliminated and the space they use for production could be rented for $3,600 to a supplier. Should Clemente make or buy the subcomponent? O A. Buy and save $12,450 OB. Make and save $1,750 OC. Buy and save $1,850 OD. Buy and save $16,050
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