Question
ShoestringCompany manufactures a part for its production cycle. The costs per unit for10,000 units of the part are as follows: Per Unit Direct materials$4.00 Direct
ShoestringCompany manufactures a part for its production cycle. The costs per unit for10,000 units of the part are as follows:
Per Unit
Direct materials$4.00
Direct labor6.00
Variable factory overhead5.00
Fixed factory overhead4.00
Total costs$19.00
The fixed factory overhead costs are avoidable.DayCompany has offered to sell10,000 units of the same part toShoestringCompany for $18per unit. Assuming no other use for the facilities,ShoestringCompany should ________.
A)makethe part to save $5,000
B)makethe part to save $15,000
C)buythe part fromDayCompany to save $10,000
D)buythe part fromDayCompany to save $15,000
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