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Exercise 12-11 Make or Buy Decision (L012-3] Han Products manufactures 39,000 units of part 5-6 each year for use on its prod

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PARTICULARS MAKE BUY
Direct material (39000 x $3.20) $124800
Direct labor (39000 x $11) $429000
Variable manufacturing overhead (39000 x $2.80) $109200
fixed manufacturing overhead (39000 x $12) x (1/3) $156000
Outside purchase price (39000 x $23) $897000
Rental value of space (opportunity cost) $89000
Total cost $908000 $897000
financial advantage $11000
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