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ockrite Security Company manufacturers home alarms. Currently, it is manufacturing one of its components at a total cost of $45 which includes fixed costs of
ockrite Security Company manufacturers home alarms. Currently, it is manufacturing one of its components at a total cost of $45 which includes fixed costs of $16 per unit. An outside provider of this component has offered to sell Lockrite the component for $35.
What is the cost savings for continuing to make the component?
Differential cost to purchase: | |
$ | |
Differential cost to manufacture: | |
$ | |
Cost savings from continuing to make the component | $ |
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