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Sally Manufacturing Company currently makes a necessary part with the following costs: Direct Materials $80,000 Direct Labor $13,000 Variable Overhead $40,000 Fixed Overhead $27,000 These
Sally Manufacturing Company currently makes a necessary part with the following costs: Direct Materials $80,000 Direct Labor $13,000 Variable Overhead $40,000 Fixed Overhead $27,000 These are the current costs to make 1000 units of the part. An outside sales person has offered to sell the part for $145 each. If the company purchases the parts, it can avoid $4,000 of the current fixed costs. What is the correct "make or buy" decision? Make and save $8,000. Buy and save $15,000 Make and save $15,000 Buy and save $19,000
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