Make-or-Buy, Traditional AnalysisWehner Company is currently manufacturing Part ABS-43, producing 54,700 units annually. The part is used in the production of several products made by Wehner. The cost per unit for ABS-43 is as follows: Direct materials$44.90Direct labor10.70Variable overhead3.50Fixed overhead3.00 Total$62.10Of the total fixed overhead assigned to ABS-43, $10,940 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part ABS-43), and the remainder is common fixed overhead. An outside supplier has offered to sell the part to Wehner for $58.92. There is no alternative use for the facilities currently used to produce the part. No significant non-unit-based overhead costs are incurred.Required:1.Should Wehner Company make or buy Part ABS-43? Wehner should - Select your answer -makebuyItem 1 the part. This will produce total cost savings of $ . 2.What is the maximum amount per unit that Wehner would be willing to pay to an outside supplier? Round your answer to the nearest cent. $ per unit
Solution ID:10036877 | Question answered on 16-Oct-2016
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