The external purchase price is $40 for a part that can be manufactured for $32 per...
The external purchase price is $40 for a part that can be manufactured for $32 per unit; the $32 manufacturing cost includes $6 per-unit allocated fixed overhead cost. What is the per-unit savings to make rather than to buy?
Homework Answers
Per unit savings to make rather than buy
= external purchase price - Cost of making
= 40 - (32-6)
= 40 - 26
= 14
Fixed overhead cost is irrelevant.
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