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Attitude, Inc. manufactures 100 units of part Z with the following costs per unit:
Direct materials $6.00
Direct Labor $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 wheter Attitude Inc. should buy or manufacture the part, and the cost saving from selecting the least-cost alternative.
A) Manufacture and save $100
B) Buy and save $200
C) Buy and save) $100
D) Manufacture and save $300
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