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Exercise 12-11 Make or Buy a Component [LO12-3] Han Products manufactures 22,000 units of part S-6 each year for use on its production line. At
Exercise 12-11 Make or Buy a Component [LO12-3] Han Products manufactures 22,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $5.20 6.00 4.00 12.00 Total cost per part $27.20 An outside supplier has offered to sell 22,000 units of part S-6 each year to Han Products for $46.00 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $582,600. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier Required a. Calculate the per unit and total relevant cost for buying and making the product? (Round your "per unit" answers to 2 decimal places.) er Un Differential Costs 22,000 Units Make Buy Make Buy Cost of purchasing Cost of making Direct materials Direct labor Variable overhead Fixed overhead Total cost
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