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Security Fire Alarm is currently buying 50,000 motherboard from MotherBoards Inc at a price of $65 per board. It was suggested at the last managers
Security Fire Alarm is currently buying 50,000 motherboard from MotherBoards Inc at a price of $65 per board. It was suggested at the last managers meeting that the company should consider making its own boards. The costs to make the part are as follows: Direct Materials $32 per unit, Direct labor $10 per unit, Variable Factory Overhead $16.00, Fixed Costs for the plant would increase by $75,000. As the financial advisor, what would you recommend? a. Buy - $75,000 more in profits b. Make - $275,000 increase in profits c. Buy - $275,000 more in profits d. Make - $350,000 increase in profits Why? how do you calculate it
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