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Quirch Inc, manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor that would provide 2,400 units of
Quirch Inc, manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor that would provide 2,400 units of product PQ107 for Valters for a price of $150,000. If Quirch does not purchase these parts from the subcontractor it must produce them in-house with the following unit costs: Cost per Unit Direct materials $31 Direct labor 19 Variable 8 overhead In addition to the above costs, if Quirch produces part PQ107 it would also have a retooling and design cost $9.800. The difference between the relevant costs of producing 2,400 units of product PQ107 and buying the same number of units is $ O $1.000 cheaper to make $14.200 cheaper to purchase $1,700 cheaper to make $10,200 cheaper to make o the same the make and purchase
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