Should nd company buy part externally or make it internally

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Reference no: EM133921697

Problem

ND Company currently buys 15,000 units of a part used to manufacture its product at $39 per unit. The supplier recently informed ND Company that a 20 percent increase will take effect next year. ND has some additional space and could produce the units for the following per-unit costs (based on 15,000 units): Direct materials $18 Direct labor $12 Variable manufacturing overhead $10 If ND purchases the units from the supplier, ND can rent out the plant for $22,500 per year. Get the instant assignment help. Should ND Company buy the part externally or make it internally?

Reference no: EM133921697

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