Solution-Should thunder make or buy the part

Should thunder make or buy the part

Assignment Help Cost Accounting

Reference no: EM132795926

Thunder company has been producing 15000 units of part 3741 for its products. The unit cost for the part is as follows:

Direct materials - $7
Direct Labour - 13
Variable manufacturing overhead - 9
Fixed manufacturing overhead - 10
Total - $39

Thunder can purchase 15000 units of part 3741 for $34 each. If the part is purchased, Thunder can make another product and provide a contribution margin of $15000. If the part is purchased, 75% of the fixed manufacturing overhead costs will be still incurred.

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Problem 1: Should Thunder make or buy the part?

Reference no: EM132795926

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Should thunder make or buy the part

Reference no: EM132795926

Reference no: EM132795926

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