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Per-Unit Total Direct materials $2.65 $7,830 Direct labor 4.80 15,400 Variable overhead 2.80 8,100 Fixed overhead 5.20 15,300 A company has offered to supply this
Per-Unit | Total | ||
Direct materials | $2.65 | $7,830 | |
Direct labor | 4.80 | 15,400 | |
Variable overhead | 2.80 | 8,100 | |
Fixed overhead | 5.20 | 15,300 |
A company has offered to supply this part to X Company for $12.60 per unit. If X Company accepts the offer, it will still incur fixed costs of $7,100, but it will be able to lease the resources that will become available from not making the part for $2,900. Next year's expected production level is 3,500 units. 11. If X Company buys the part next year instead of making it, it will save
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