Cruise Company produces a part that is used in the manufacture of one of its pro

Question

Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this? part, assuming a production level of 6 comma 0006,000 ?units, are as? follows: Direct materials $ 4.2$4.2 Direct labor $ 4.4$4.4 Variable manufacturing overhead $ 3.3$3.3 Fixed manufacturing overhead $ 1.4$1.4 Total cost $ 13.3$13.3 The fixed overhead costs are unavoidable. Suri Company has offered to sell 6 comma 0006,000 units of the same part to Cruise Company for $ 14$14 per unit. Assuming the company has no other use for its? facilities, what should Cruise Company? do? A. Make the part and save $ 10.5$10.5 per unit. B. Buy from Suri and save $ 0.7$0.7 per unit. C. Make the part and save $ 6.1$6.1 per unit. D. Make the part and save $ 2.1$2.1 per unit Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this? part, assuming a production level of 6 comma 0006,000 ?units, are as? follows: Direct materials $ 4.2$4.2 Direct labor $ 4.4$4.4 Variable manufacturing overhead $ 3.3$3.3 Fixed manufacturing overhead $ 1.4$1.4 Total cost $ 13.3$13.3 The fixed overhead costs are unavoidable. Suri Company has offered to sell 6 comma 0006,000 units of the same part to Cruise Company for $ 14$14 per unit. Assuming the company has no other use for its? facilities, what should Cruise Company? do? A. Make the part and save $ 10.5$10.5 per unit. B. Buy from Suri and save $ 0.7$0.7 per unit. C. Make the part and save $ 6.1$6.1 per unit. D. Make the part and save $ 2.1$2.1 per unit Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this? part, assuming a production level of 6 comma 0006,000 ?units, are as? follows: Direct materials $ 4.2$4.2 Direct labor $ 4.4$4.4 Variable manufacturing overhead $ 3.3$3.3 Fixed manufacturing overhead $ 1.4$1.4 Total cost $ 13.3$13.3 The fixed overhead costs are unavoidable. Suri Company has offered to sell 6 comma 0006,000 units of the same part to Cruise Company for $ 14$14 per unit. Assuming the company has no other use for its? facilities, what should Cruise Company? do? Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this? part, assuming a production level of 6 comma 0006,000 ?units, are as? follows: Direct materials $ 4.2$4.2 Direct labor $ 4.4$4.4 Variable manufacturing overhead $ 3.3$3.3 Fixed manufacturing overhead $ 1.4$1.4 Total cost $ 13.3$13.3 The fixed overhead costs are unavoidable. Suri Company has offered to sell 6 comma 0006,000 units of the same part to Cruise Company for $ 14$14 per unit. Assuming the company has no other use for its? facilities, what should Cruise Company? do? Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this? part, assuming a production level of 6 comma 0006,000 ?units, are as? follows: 6 comma 0006,000 Direct materials $ 4.2$4.2 Direct labor $ 4.4$4.4 Variable manufacturing overhead $ 3.3$3.3 Fixed manufacturing overhead $ 1.4$1.4 Total cost $ 13.3$13.3 The fixed overhead costs are unavoidable. Direct materials $ 4.2$4.2 Direct labor $ 4.4$4.4 Variable manufacturing overhead $ 3.3$3.3 Fixed manufacturing overhead $ 1.4$1.4 Total cost $ 13.3$13.3 The fixed overhead costs are unavoidable. Suri Company has offered to sell 6 comma 0006,000 units of the same part to Cruise Company for $ 14$14 per unit. Assuming the company has no other use for its? facilities, what should Cruise Company? do? 6 comma 0006,000 $ 14$14 A. Make the part and save $ 10.5$10.5 per unit. B. Buy from Suri and save $ 0.7$0.7 per unit. C. Make the part and save $ 6.1$6.1 per unit. D. Make the part and save $ 2.1$2.1 per unit A. Make the part and save $ 10.5$10.5 per unit. B. Buy from Suri and save $ 0.7$0.7 per unit. C. Make the part and save $ 6.1$6.1 per unit. D. Make the part and save $ 2.1$2.1 per unit A. Make the part and save $ 10.5$10.5 per unit. B. Buy from Suri and save $ 0.7$0.7 per unit. C. Make the part and save $ 6.1$6.1 per unit. D. Make the part and save $ 2.1$2.1 per unit A. Make the part and save $ 10.5$10.5 per unit. B. Buy from Suri and save $ 0.7$0.7 per unit. C. Make the part and save $ 6.1$6.1 per unit. D. Make the part and save $ 2.1$2.1 per unit A. Make the part and save $ 10.5$10.5 per unit. A. Make the part and save $ 10.5$10.5 per unit. Make the part and save $ 10.5$10.5 per unit. $ 10.5$10.5 B. Buy from Suri and save $ 0.7$0.7 per unit. B. Buy from Suri and save $ 0.7$0.7 per unit. Buy from Suri and save $ 0.7$0.7 per unit. $ 0.7$0.7 C. Make the part and save $ 6.1$6.1 per unit. C. Make the part and save $ 6.1$6.1 per unit. Make the part and save $ 6.1$6.1 per unit. $ 6.1$6.1 D. Make the part and save $ 2.1$2.1 per unit D. Make the part and save $ 2.1$2.1 per unit Make the part and save $ 2.1$2.1 per unit $ 2.1$2.1

Explanation / Answer

Answer is Make the product and save $ 2.10 per unit Explanation: Cost of Purchase per unit 14 Less: Savings in manufacturing cost Material 4.2 Labour 4.4 Variable Manufacturing OH 3.3 Net Incremental loss on purchase per unit -2.1

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