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Homework Problem: Decide whether to make or buy by completing the following table at a purchase price of $39 per unit for 10,000 units.

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Homework Problem: Decide whether to make or buy by completing the following table at a purchase price of $39 per unit for 10,000 units. Again, 25% of fixed overhead will be saved. Cost per Unit Direct Material $8 Direct Labor $10 Variable Overhead $9 Fixed Overhead $15 ($1.50 per direct labor $) $42 Total ? ? ? ? ? Total Make Buy ? Per Unit Cost Make Buy Purchase Price $39 - Direct Material $8 ? Direct Labor $10 Variable $9 -?? Overhead Fixed Overhead $15 ? ? Total Costs ? ? ? Difference ? Question: Should the unit be purchased or made? ??

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