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please show work! thank you! DSP Manufacturing produces a small refrigerator that requires a motor. It has the opportunity to purchase these Motors from a
please show work! thank you!
DSP Manufacturing produces a small refrigerator that requires a motor. It has the opportunity to purchase these Motors from a reliable supplier at a purchase price of $22 per motor. Currently, DSP manufactures the motors. DSP's costs for it production of 5,000 motors are as follows: Variable Costs per Motor: Direct Materials Direct Labor Variable Overhead Fixed Costs per Motor $2.00 $8.00 $6.00 $10.00 If DSP purchases the motors, 70% of the fixed costs can be eliminated. DSP should (type make or buy) the motors, because the net income would increase by (type in the dollar amount of change)Step by Step Solution
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