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To make a batch of 900 units, it is estimated that 1.05 direct hours are required at a cost of 412 per hour. Direct material
To make a batch of 900 units, it is estimated that 1.05 direct hours are required at a cost of 412 per hour. Direct material costs are estimated at $1, 800 per batch. The overhead costs are calculated based on as overhead rate of $7.50 per direct labor hour. The item can be readily purchased from a local vender for $5 per unit. Should the item be manufactured or purchased? 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
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