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em 2. The Crown Company must decide whether to make or buy part 128PC. Although Crown's idle equipment could be used to produce up to
em 2. The Crown Company must decide whether to make or buy part 128PC. Although Crown's idle equipment could be used to produce up to 10,000 units of the part, the company presently needs only 7.000 units. The following shows the estimated cost of making part 128PC. Allocated general manufacturing overhead Depreciation on existing equipment Annual additional set-up and maintenance costs $50,000 15,000 20,000 85,000 Total fixed costs Direct materials Direct labor Variable overhead S5 Total variable manufacturing costs S15per unit Reuten Company will sll part 128PC to the Crown Company for $20 per unit. If Crown Company bu annual additional set-up and maintenance costs can be avoided Required: Determine whether Crown should make or buy the part, and explain why. Show your working steps
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