Business, 04.03.2020 23:31, gameranonymous266

S Corp. produces premium office chairs. Due to a recent change in market share, S must decide whether to make or buy an order of 1,000 chairs. The materials cost of producing a chair is $20 per pound, the cost of direct labor is $40 per direct labor hour, and manufacturing overhead (100% variable) is allocated at a rate of $10 per chair. Fixed costs for the year are $5 per chair, of which 20% are avoidable. Each chair requires 2 pounds of materials and 1 hour of direct labor to complete.
Assuming that S has excess capacity, the total cost per chair relevant to the make-or-buy decision is .

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S Corp. produces premium office chairs. Due to a recent change in market share, S must decide whethe...