E $8-6$ Make$-$or$-$Buy Decisions

Tricia Company has been manufacturing $9,000$ units of part Y for its products. The unit

cost for the part is as follows:

Direct materials $ $9$

Direct labor $24$

Variable manufacturing overhead $12$

Fixed manufacturing overhead $18$

Total $ $63$

A supplier has offered to sell $9,000$ units of part Y to Tricia for $$54$ each. If the part is

purchased, Tricia can use its facilities to manufacture another product, which would

generate a contribution margin of $$12,000.$ Seventy$-$five percent of the fixed

manufacturing overhead costs are indirect and will still be incurred even if the part is

purchased.

Compute the net differential cost in deciding whether to make or buy the part.