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Whiteside Corporation manufactures a variety of appliances which all use Part B89. Currently, Whiteside Corporation manufactures Part B89 in its internal manufacturing process. Whiteside
Whiteside Corporation manufactures a variety of appliances which all use Part B89. Currently, Whiteside Corporation manufactures Part B89 in its internal manufacturing process. Whiteside Corporation produces 12,000 units of Part B89 annually. The annual costs to product Part B89 at the level of 12,000 units include: Direct materials $3.30 Direct labor $8.10 Variable manufacturing $4.20 overhead Fixed manufacturing $3.40 overhead Total cost $19.00 All of the fixed manufacturing overhead costs would continue whether Part B89 is made internally or purchased from an outside supplier. The company has no alternative use for its manufacturing facilities. Nadal Parts Company has offered to sell 12,000 units of Part B89 to Whiteside Corporation for $20.00 per unit. What should Whiteside Corporation do?
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