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Swasey Manufacturing needs to determine if it would be cheaper to make 10,000 units of a component in-house or to purchase the units from an

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Swasey Manufacturing needs to determine if it would be cheaper to make 10,000 units of a component in-house or to purchase the units from an outside supplier for $4.75 each. Cost information on internal production includes the following. Fixed overhead will continue whether the component unit is produced internally or externally. No additional costs of purchasing will be incurred beyond the purchase price. Required: 1. Name the alternatives available to Swasey Manufacturing. 2. List the relevant cost(s) of internal production vs. purchasing the component unit externally. 3. Which alternative is more cost effective and by how much? 4. Now assume that the fixed overhead includes $10,000 of costs that can avoided if the component unit is purchased externally. Which alternative is more cost effective and by how much? 5. If the cost difference is minimal between alternatives, what other details might be considered in making the decision

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