To make a batch of 900 units, it is estimated that 120 direct labor hours are required at a cost of $6 per hour. Direct material costs are estimated at $1,200 per batch. The overhead costs are calculated based on an overhead rate of $7.50 per direct labor hour. The item can be readily purchased from a local vendor for $6 per unit.

Chapter 11, Problem 013 (GO Tutorial) To make a batch of 900 units, it is estimated that 120 direct labor hours are required at a cost of $6 per hour. Direct material costs are estimated at $1,200 per batch. The overhead costs are calculated based on an overhead rate of $7.50 per direct labor hour. The tem can be readily purchased from a local vendor for $6 per unit. a. Should the item be manufactured or purchased? b. What is the break-even value for the overhead rate (dollars per direct labor hour)? Assume that the material costs, labor hours, and labor costs do not change. Round your answer to 2 decimal places. The tolerance is + 0.5