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The Ayayai Company manufactures 3,600 units of a part that could be purchased from an outside supplier for $14 each. Ayayai's costs to manufacture each
The Ayayai Company manufactures 3,600 units of a part that could be purchased from an outside supplier for $14 each. Ayayai's costs to manufacture each part are as follows: Direct materials $3 Direct labor 2 Variable manufacturing overhead 5 Fixed manufacturing overhead 9 Total $19 All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses. (a-b) (a) Calculate relevant cost to make. Relevent cost to make $ per unit (b) Should Ayayai continue to manufacture the part? (c-d) (c) If Ayayai could lease the manufacturing facilities to another company for $23,600 per year, what would be the net total cost to outsource production of the part? Net cost to buy $ (d) Should Ayayai outsource production of the part given the opportunity to lease the facilities? e Textbook and Media Save for Later Attempts: 0 of 3 used Submit
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