Reference no: EM132765588

Problem - A manufacturer is considering whether to make or buy a component used in its production. The annual cost of producing the 10,000 parts is as follows. Direct variable manufacturing costs $300,000 Direct fixed manufacturing costs $100,000 Allocated overhead $50,000 If the manufacture buys the component, the direct fixed manufacturing costs can be reduced by 69 per cent. What is the maximum unit purchasing price that makes purchasing a beneficial decision in comparison to making?