Question
GPB Incorporated manufactures widgets. They are trying to determine whether they should continue to make the product 'in-house' or outsource the manufacturing. See below
GPB Incorporated manufactures widgets. They are trying to determine whether they should continue to make the product 'in-house' or outsource the manufacturing. See below for details: Direct Materials $ Per Unit $10.00 Direct Labour Variable Overhead Fixed Overhead Total Cost/Unit 15.00 5.00 6.00 $36.00 Volume = 10,000 Units An outside manufacturer offered to produce the unit for us at a total cost of $32/unit. If we were to go with the outsource contract, we'd still incur $30,000 of fixed ovrehead costs. All other manufacturing costs are avoidable. REQUIRED: Determine whether or not we should make the product in-house or outsource based on a financial analysis.
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