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Smithton Company is planning to introduce a new portable computer to its existing product line. Management must decide whether to make the computer case or

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Smithton Company is planning to introduce a new portable computer to its existing product line. Management must decide whether to make the computer case or buy it from an outside supplier. The lowest outside price is $90. The cost to make it includes direct materials $40. direct labor. $32 variable overhead $10 and allocated fixed overhead of $480,000 per year which are unavoidable whether they make or buy. If the case is produced Internally, the company will have to purchase new equipment that will yield annual depreciation of $130,000. The company will also need to rent a new production facility at $200,000 a year Required: Calculate the total incremental cost of making 20,000 and buying 20,000 cases. Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Make or Buy Calculate the total incremental cost of making 20.000 cases. Incremental Costs to Make Relevant Balevant Amount per Fired Costs Unit Total Relevant Costs Tota noremental cost to make Costs to Buy > POLO SU Ule palluIIULUUSIue Supplier Complete this question by entering your answers in the tabs below. costs to Make costs to Bild make or Buy Calculate the total incremental cost of buying 20,000 cases. Incremental Costs to Buy Relevant Relevant Amount per Unit Fixed Costs Total Relevant Costs Total incremental cost to buy Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Make or Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Should Smithton make the part or purchase it from the outside supplier?

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