Question

Hun Products manum 21.000 st 4 ch your te onts production tre. A to level of the cost per un to part 4* 460 8.00 ng we And where to 1.000 6 each year to a Product 30 the owner ther company to 30.000 evran Products were purch oled to it would compare 1. Ceper und andere out for buying and making the product Round your www tools Costa Buy Buy 000 000

Answer 1

	Per Unit Differential Costs		21,000 Units
	Make	Buy	Make	Buy
Cost of Purchasing		$ 20		$ 903,000
Cost of Making
Direct Materials	$ 4.60		$ 96,600
Direct Labour	$ 8		$ 168,000
Variable overhead	$ 2.40		$ 50,400
Fixed overhead	$ 3 ( $ 9 (-) $ 6 )		$ 63,000
Opportunity Cost			$ 530,000
Total Cost			$ 908,000	$ 903,000
		Increase in profit on making	$ 5,000
Profit Would be decreased by $ 5,000