Business, 15.05.2020 07:57 therealdest

McMurphy Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 12,000 units of this part are as follows:

Direct materials $86,000
Direct labor 126,000
Variable factory overhead 58,000
Fixed factory overhead 138,000
Total costs $408,000

Of the fixed factory overhead costs, $55,000 is avoidable. Conners Company has offered to sell 12,000 units of the same part to McMurphy Corporation for $41 per unit.

Assuming there is no other use for the facilities, Schmidt should .

A) make the part, as this would save $14 per unit
B) make the part, as this would save $16 per unit
C) buy the part, as this would save the company $192,000
D) buy the part, as this would save $16 per unit

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McMurphy Corporation produces a part that is used in the manufacture of one of its products. The cos...

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