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Every year Underwood Industries manufactures 1 5 , 0 0 0 units of part 2 3 1 for use in its production cycle. The per
Every year Underwood Industries manufactures units of part for use in its production cycle. The per unit costs of part are as follows:
Direct materials
$
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Total
$
Flintrock, Inc., has offered to sell units of part to Underwood for $ per unit. If Underwood accepts Flintrocks offer, its freedup facilities could be used to earn $ in contribution margin by manufacturing part In addition, Underwood would eliminate of the fixed overhead applied to part
Required
Calculate total relevant cost to make and net relevant cost to buy.
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