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Lundon Company uses 5,000 units of Part X each year as a component in the assembly of one of its products. The company is presently
Lundon Company uses 5,000 units of Part X each year as a component in the assembly of one of its products. The company is presently producing Part X internally at a total cost of $80,000 as follows: Direct Material 18,000 Direct Labor 20,000 Variable MOH 12,000 Fixed MOH 30,000 Total 80,000 An outside supplier has offered to provide Part X at a price of $13 per unit. If Lundon variable overhead could be eliminated, should Lundon Company make or buy Part X
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