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Help on this question. thank you AE2-MakeorBuyDecision Company Snooze manufacture part G in its production plant in Tuas To manufacture part G: Total quantity required
Help on this question. thank you
AE2-MakeorBuyDecision Company Snooze manufacture part G in its production plant in Tuas To manufacture part G: Total quantity required =10,000 units Cost per unit of G : Direct material $6.00 Fixed Overhead $11.00 (include fixed rental expense of $70,000 ) A supplier Sleepy offers to sell part G to the Company at $40.00 per unit The Company will save fixed rental expense of $51,000.00 and $4.00 per unit of the fixed overhead will be avoidable if the Company choose to buy instead of make (a) Which option is beneficial and Justify the option chosen? Option 1 : to Make Option 2 : to Buy (b) In addition, if Company Snooze chooses to buy part G from Sleepy, the production facility freed up can be rented to its neighbour Company Sunshine. How much rental fees Company Snooze will charge Company Sunshine if it wants to generate a net savings of $200,000
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