Biology Forums - Study Force

Power Tools, Inc. produces gas-powered leaf blowers. The company is currently not operating at full capacity. The plant manager is considering making the rewind assembly for the pull cord which is now being purchased from a supplier at $22 each. Power Tools already has the equipment to produce the assembly. The plant manager has analyzed the cost of producing the assemblies and determined that each assembly will require $8 of direct material, $6 of direct labor, and $12 of manufacturing overhead. Two-thirds of the manufacturing overhead is a fixed cost that would not be affected by the decision to manufacture the brackets. Should Paper Moon continue to purchase the brackets or produce them internally?

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