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Should robbins co make or buy the part

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Reference no: EM132481412

Robbins Co. has been producing a part for a camera they manufacture. The costs for this part are as follows:

Fixed cost            392,000

total variable cost  112,000

Units produced            28,000

Robbins has an opportunity to purchase this part rather than manufacture it. To purchase the part will cost $3 a unit. If the part is purchased, fixed costs will be reduced by 20%.

Question 1: Should Robbins Co. make or buy this part? Show how you arrived at your decision.

Reference no: EM132481412

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