Question
Rubium Micro Devices currently manufactures a subassembly for its main product. The costs per unit are as follows: Direct materials $54.00 Direct labor 35.00 Variable
Rubium Micro Devices currently manufactures a subassembly for its main product. The costs per unit are as follows:
| Direct materials | $54.00 |
| Direct labor | 35.00 |
| Variable overhead | 40.00 |
| Fixed overhead | 34.00 |
| Total | $163.00 |
Crayola Technologies Inc. has contacted Rubium with an offer to sell 6,000 of the subassemblies for $144.00 each. Rubium will eliminate $89,000 of fixed overhead if it accepts the proposal. Should Rubium make or buy the subassemblies? What is the difference between the two alternatives?
| Make; savings = $203,000 | ||
| Make; savings = $1,000 | ||
| Buy; savings = $7,000 | ||
| Buy; savings = $89,000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
The Marketing Audit Handbook Tools Techniques And Checklists To Exploit Your Marketing Techniques
Authors: Aubrey Wilson
1st Edition
0749437359, 978-0749437350
