Question
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 units, are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost The fixed overhead costs are unavoidable. Assuming Cruise Company can purchase units of the part from Suri Company for each, and the facilities currently used to make the part could be rented out to another manufacturer for a year, what should Cruise Company do? (Round intermediary and final calculations to the nearest cent.) A. Buy the part and save per unit. B. Buy the part and save per unit. C. Make the part and save per unit. D. Make the part and save per unit.
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 6,100 units, are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost The fixed overhead costs are unavoidable. $4.30 $4.00 $3.00 $1.10 $12.40 Assuming Cruise Company can purchase 6,100 units of the part from Suri Company for $14.40 each, and the facilities currently used to make the part could be rented out to another manufacturer for $29,000 a year, what should Cruise Company do? (Round intermediary and final calculations to the nearest cent.) O A. Buy the part and save $1.65 per unit. B. Buy the part and save $2.00 per unit. C. Make the part and save $5.90 per unit. D. Make the part and save $13.30 per unitStep by Step Solution
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