Prepare computations to show whether or not make-it-work

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Reference no: EM133344979

Question: Make-it-Work Ltd manufactures 55,500 units of cushions for use in its production line. At this level of activity, the cost per unit of cushion is as follows:

Direct materials $6.66
Direct labour 18.50
Variable overhead 4.44
Fixed overhead 16.65
Total cost per cushion $46.25

An outside supplier has offered to sell 55,500 units of cushions to Make-it-Work Ltd for
$35 per cushion.

Prepare computations to show whether or not Make-it-Work should continue to make the cushions or accept the outside supplier's offer.

Reference no: EM133344979

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