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Mighty Safe Fire Alarm is currently buying 57,000 motherboards from Motherboard, Inc. at a price of $66 per board. Mighty Safe is considering making its
Mighty Safe Fire Alarm is currently buying 57,000 motherboards from Motherboard, Inc. at a price of $66 per board. Mighty Safe is considering making its own motherboards. The costs to make the motherboards are as follows: direct materials, $29 per unit; direct labor, $11 per unit; and variable factory overhead, $16 per unit. Fixed costs for the plant would increase by $85,000. Which option should be selected and why? Oa, make, $485,070 increase in profits Ob. make, $570,000 increase in profits Oc. buy, $85,000 more in profits Od. buy, S485,070 more in profits
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