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The Bramble Company manufactures 3,800 units of a part that could be purchased from an outside supplier for $14 each. Brambles costs to manufacture each
The Bramble Company manufactures 3,800 units of a part that could be purchased from an outside supplier for $14 each. Brambles 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) Calculate relevant cost to make.
Relevent cost to make | $enter relevent cost to make in dollars per unit per unit |
(b) Should Bramble continue to manufacture the part?
Yes or No |
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