Question
Piels Corporation has a capacity to produce 340,000 units and currently produces 310,000 units. The costs associated with the production of 1 unit as follows:
Piels Corporation has a capacity to produce 340,000 units and currently produces 310,000 units. The costs associated with the production of 1 unit as follows: Direct materials $10 Direct labor 15 Variable factory overhead 7 Fixed factory overhead (plant lease, insurance) 8 Total costs $40 Conners Company has offered to sell 10,000 units to Piels Corporation for $36 per unit, company should:
A. make these units, as this would save $2 per unit
B. make these units, as this would save the company $40,000
C. make these units, as this would save the company $60,000
D. buy these units, as this would save $6 per unit
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