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Mighty Safe Fire Alarm is currently buying 56,000 motherboards from MotherBoard, Inc. at a price of $67 per board. Mighty Safe is considering making
Mighty Safe Fire Alarm is currently buying 56,000 motherboards from MotherBoard, Inc. at a price of $67 per board. Mighty Safe is considering making its own motherboards. The costs to make the motherboards are as follows: direct materials, $30 per unit; direct labor, $11 per unit; and variable factory overhead, $14 per unit. Fixed costs for the plant would increase by $89,000. Which option should be selected and why? Oa. buy, $582,960 more in profits Ob. make, $582,960 increase in profits Oc. make, $672,000 increase in profits Od. buy, $89,000 more in profits
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