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Mighty Safe Fire Alarm is currently buying 61,000 motherboards from Motherboard, Inc., at a price of $68 per board. Mighty Safe is considering making its
Mighty Safe Fire Alarm is currently buying 61,000 motherboards from Motherboard, Inc., at a price of $68 per board. Mighty Safe is considering making its own boards. The costs to make the board are as follows: direct materials, $32 per unit; direct labor, $10 per unit; and variable factory overhead, $15 per unit. Fixed costs for the plant would increase by $87,000. Which option should be selected and why? Ca. make, $583,770 increase in profits b. buy, $87,000 increase in profits c. make, $671,000 increase in profits d. buy, S583,770 increase in profits
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