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Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a
Cruise Company 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 6,000 units, are as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost The fixed overhead costs are unavoidable S4.40 54.50 S3.00 $1.00 $12.90 Assume Cruise Company can purchase 6,000 units of the part from Suri Company for $14.20 each, and the facilities currently used to make the part could be used to manufacture 6,000 units of another product that woul have an $8.00 per unit contribution margin. If no additional fixed costs would be incurred, what should Cruise Campany do? O A. Continue to make the part to earn an extra $2.00 per unit contribution to profit. O B. Make the new product and buy the part to earn an extra $5.70 per unit contribution to proft. O C. Continue to make the part to carn an extra S4.90 per unit contribution to profit. D. Make the new product and buy the part to earn an extra S6.20 per unit contribution to profit
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