The Williams Company currently produces 20,000 units of part B13. Current costs

Question

The Williams Company currently produces 20,000 units of part B13. Current costs for part B13 are as follows:
Direct materials $12
Direct labor 9
Factory rent 7
Administrative 6
General factory overhead 7
Total $41
If the company decides to buy part B13, 50% of the administrative costs would be avoided. All of the Williams Company items (including this part) are manufactured in the same rented production facility.
The company has an offer from a wholesaler to purchase the part for $31 per unit. If the company decides to accept the offer:

Explanation / Answer

the cost for this part would be the same

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