Determine whether attitude inc. should buy

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Question: Attitude, Inc. manufactures 100 units of part Z with the following costs per unit: Direct materials $ 6.00 Direct labour $ 2.00 Variable overhead $ 3.00 Fixed overhead $ 6.00 Total unit cost to make $ 17.00 Attitude Inc. has recently learned that it can purchase these 100 units from Device, Inc. for a total cost of $1,500. If the part were bought from Device; $1 per unit of the fixed overhead costs assigned to part Z could be totally eliminated. The unused capacity has no alternative use. Determine whether Attitude Inc. should buy or manufacture the part, and the cost saving from selecting the least-cost alternative.

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Reference no: EM133926962

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