X-4 Unusual Make Buy Decision Breath-Away is a new mouthwash in a small spray container to be manufactured by Hy-Gene Corporation. The product will be sold to wholesalers and large drugstore chains in packages of 30 containers for $18.00 per package. Management allocates $200,000 of fixed production overhead costs to Breath-Away. The manufacturing cost per package of Breath-Away for expected production of 100,000 packages is: Direct material per package $ 6.50 Direct labor per package 3.50 Overhead per package (fixed and variable) 3.00 Total per package $13.00 Hy-Gene has contacted packaging suppliers to determine if it would be better to buy the spray container rather than manufacture it. The lowest quote for the spray containers was $1.75 per 30 bottles. It is estimated that purchasing the sprayers from a supplier would save 10% of direct materials, 20% of direct labor, and 15% of variable overhead. Hy-Gene's manufacturing space is highly constrained. By purchasing the spray containers, Hy-Gene will not have to lease additional manufacturing space that is estimated to cost $15,000 per year. If the spray containers are purchased, Hy-Gene estimates that one supervisory position can be eliminated. Salary plus benefits for this position are $32,500 per year. 1. What is the difference between the make and buy costs? Submit Answer Tries 0/5 2. At what volume level will Breath-Away be indifferent between making and buying? Submit Answer Tries 0/5