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Whirlygig Whirlygig Co. manufactures electric scooters. It is currently operating at 70% capacity, producing 10,000 units per year. Wheels for the scooter are purchased from
Whirlygig Whirlygig Co. manufactures electric scooters. It is currently operating at 70% capacity, producing 10,000 units per year. Wheels for the scooter are purchased from an external supplier for $20 per unit (a unit being a full set of wheels). Whirlygig is considering making its own wheels and has identified the following relevant cost information per unit: $10 $5 Direct materials Direct labour Variable factory overhead Allocated overhead Required: a) Should Whirlygig make or buy the wheels? b) The factory space used for making the wheels could be rented out for $10,000 per month. What decision should Whirlygig make? Present your answer in a schedule with the possible decisions on the top row
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