ColorPro uses part 87A in the production of color printers. Unit manufacturing costs for part 87A are: Direct materials $8 Direct labor 2 Variable overhead 1 Fixed overhead 4 ColorPro uses 100,000 units of 87A per year. Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12. Fixed overhead is unavoidable. Should ColorPro make or buy the part?
A. Buy the part because it will save $300,000 over making it.
B. Buy the part because it will save 1,100,000 over making it.
C. Make the part because it will save $100,000 over buying it.
D. Buy the part because it will save $100,000 over making it.
E. Make the part because it will save $1,100,000 over buying it.
Answers: 1
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ColorPro uses part 87A in the production of color printers. Unit manufacturing costs for part 87A ar...
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