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Crane produces 1000 units of a part needed for its product, incurring the following costs: Direct material $ 20,300 Direct labor 6,200 Variable overhead 12,400
Crane produces 1000 units of a part needed for its product, incurring the following costs: Direct material $ 20,300 Direct labor 6,200 Variable overhead 12,400 Fixed overhead 7,200 If Crane purchases the component externally, $3100 of the fixed costs can be avoided. Below what external price per unit for the 1000 units would Crane choose to outsource (buy) instead of insource (make)?
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