Birch Company manufactures a part for its production cycle. The costs per unit f
ID: 2464858 • Letter: B
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Birch Company manufactures a part for its production cycle. The costs per unit for 5,000 units of this part are as follows: Direct materials $3 Direct labor 5 Variable factory overhead 4 Fixed factory overhead 4 Total costs $16 The fixed factory overhead costs are unavoidable. Spalding Corporation has offered to sell 5,000 units of the same part to Birch Company for $15 a unit. Assuming no other use for the facilities, Birch Company should _____. A. buy from Scalding Corp to save $3 per unit B. buy from Scalding Corp to save $1 per unit C. make the part to save $1 per unit D. make the part to save $3 per unit
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