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Every year Marigold Industries manufactures 6,100 units of part 231 for use in its production cycle. The per unit costs of part 231 are
Every year Marigold Industries manufactures 6,100 units of part 231 for use in its production cycle. The per unit costs of part 231 are as follows: Direct materials $4.00 Direct labor 10.00 Variable manufacturing overhead 6.00 Fixed manufacturing overhead 10.00 Total $30.00 Carla Vista, Inc., has offered to sell 6,100 units of part 231 to Marigold for $34 per unit. If Marigold accepts Carla Vista's offer, its freed-up facilities could be used to earn $10,700 in contribution margin by manufacturing part 240. In addition, Marigold would eliminate 40% of the fixed overhead applied to part 231. (a) Calculate total relevant cost to make and net cost to buy. (b) Total relevant cost to make $ Net relevant cost to buy $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer
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