Solution A:
Make | Buy | |||
Per unit | Total | Per unit | Total | |
Purchase Price | $20.00 | $2,00,000 | ||
Direct Materials | $4.40 | $44,000 | ||
Direct Labor | $5.70 | $57,000 | ||
Variable Overhead | $3.00 | $30,000 | ||
Fixed Overhead | $2.00 | $20,000 | ||
Opportunity Cost | $1.00 | $10,000 | ||
Total Relevant Cost | $16.10 | $1,61,000 | $20.00 | $2,00,000 |
Solution B:
Decision = Make part B
ABC Corporation produce a part B that is used in the manufacture of one of its...
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