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Home Q & A Board Other Fields Homework Help Business Accounting
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bernie2981 bernie2981
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8 years ago
Cruise Company produces a part that is used in the manufacture of one of its products. The unit
manufacturing costs of this part, assuming a production level of 6,000 units, are as follows:

Direct materials   $4.00
Direct labor   $4.00
Variable manufacturing overhead   $3.00
Fixed manufacturing overhead   $1.00
Total cost   $12.00
The fixed overhead costs are unavoidable.   

Suri Company has offered to sell 6,000 units of the same part to Cruise Company for $14 per unit. Assuming the company has no other use for its facilities, what should Cruise Company do?
A) Make the part and save $6 per unit.
B) Buy from Suri and save $2 per unit.
C) Make the part and save $10 per unit.
D) Make the part and save $3 per unit.
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
Author:
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nucleinuclei
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8 years ago
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#2
3 years ago
Thank you
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#3
3 years ago
Thank you!
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