asked 179k views
2 votes
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: 36) Direct materials Direct labor Variable factory overhead Fixed factory overhead $86,000 126,000 58,000 138,000 $408,000 Total costs 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

asked
User Pheona
by
7.5k points

1 Answer

6 votes

Answer:

the correct answer is

A) make the part, as this would save $14 per unit

answered
User Jason Tyler
by
8.3k points
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