HappyFruit Cell Phones makes consumer grade cellar devices. The Company is currently making their own chargers....
HappyFruit Cell Phones makes consumer grade cellar devices. The Company is currently making their own chargers. The production cost information per charger is presented below
| Direct Materials | $4.55 |
| Direct Labor | $4.71 |
| Variable Overhead | $3.81 |
| Fixed Overhead | $11 |
Another company has offered to sell HappyFruit the charger they supply with their devices $19 per charger.
None of the fixed overhead can be avoided. What is the cost/benefit of purchasing the charger from the outside supplier on a per unit basis. Enter a net cost as a negative number (ie. -1.50). Enter a net benefit as a positive number (ie. 1.50). Round your answer to two decimal places.
Homework Answers
| Make | Buy | |
| Direct material | 4.55 | |
| Direct labor | 4.71 | |
| Variable overhead | 3.81 | |
| Purchase cost | 19 | |
| Total relevant cost | 13.07 | 19 |
Net cost = 13.07-19 = -5.93
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HappyFruit Cell Phones makes consumer grade cellar devices. The
Company is currently making their own chargers....
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