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Gent Designs requires part A for manufacturing its best selling product. Currently, part A is made by Gent, with these per-unit costs in a month
Gent Designs requires part A for manufacturing its best selling product. Currently, part A is made by Gent, with these per-unit costs in a month when 4,000 units were produced: Direct materials $4.80 Direct labor $1.50 Manufacturing overhead $1.40 Total $7.70 Variable manufacturing overhead is applied at $1.15 per unit. The other $0.25 of overhead consists of allocated fixed costs. Gent will need 5,500 units of part A for the next year's production. Cory Corporation has offered to supply 5,500 units of part A at a price of $7.50 per unit. If Gent accepts the offer, all of the variable costs will be avoided. Fixed costs will not be affected. Should Gent Designs accept the offer from Cory Corporation? Round to the nearest cent (2 decimal places) Cost to Buy $ Cost to make $ Should Gent Designs accept the offer from Cory? Yes/No
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