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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 6500 units are as follows: $4.00 $4.00 $3.50 irect materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost The fixed overhead costs are unavoidable. $1.50 $13.00 Assuming Cruise Company can purchase 6500 units of the part from Suri Company for $14.00 each, and the facilities currently used to make the part could be rented out to another manufacturer for $25,000 a year, what should Cruise Company do? Make the part and save $12.50 per unit. Make the part and save $6.00 per unit Buy the part and save $1.00 per unit. Buy the part and save $1.35 per unit
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