This Question: 2 pts 18 of 25 (0 complete) This Test: 50 pts possible m: co unit

Question

This Question: 2 pts 18 of 25 (0 complete) This Test: 50 pts possible m: co units, are as follows Direct materials Direct labor $4.50 $4.10 $3.00 $1.50 $13.10 overhead overhead Total cost t Journa The fixed overhead costs are unavoidable. Suri Company has offered to sell 6,500 units of the same part to Cruise Company for $14.40 per unt. Assuming the company has no other use for its facilites, what should Cruise Company do? OA. Make the part and save $6.00 per unit. O B. Make the part and save $10.10 per unit. O C. Make the part and save $2.80 per unit O D. Buy from Suri and save $1.30 per unit.

Explanation / Answer

Solution:-

C. Make the part and save $2.80 per unit

Explanation:-

Cost in make = 4.50 + 4.10 + 3.00 = 11.60

Cost in buy = 14.40

Savin in make = 14.40 - 11.60 = $2.80

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