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Make-or-Buy, Traditional Analysis Wehner Company is currently manufacturing Part A85-43, producing 59,000 units annually. The part is used in the production of several products made
Make-or-Buy, Traditional Analysis Wehner Company is currently manufacturing Part A85-43, producing 59,000 units annually. The part is used in the production of several products made by Wehner The cost per unit for A85-43 is as follows: Direct materials $42.10 9.25 Direct labor Variable overhead 2.10 Fixed overhead Total 3.10 $56.55 Of the total fixed overhead assigned to ABS-43, $17,523 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part ABS-43), and the remainder is common fixed overhead. An outside supplier has offered to sell the part to Wehner for $53.32. There is no alternative use for the facilities currently used to produce the part. No significant non-unit-based overhead costs are incurred. Required: 1. Should Wehner Company make or buy Part ABS-437 Wehner should buy the part. This will produce total cost savings of 2. What is the maximum amount per unit that Wehner would be willing to pay to an outside supplier? Round your answer to the nearest cent. per unit
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