Business, 15.12.2020 16:40 lilly9645

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 6,000 units, are as follows: Direct Materials $4.00
Direct Labor $4.00
Variable manufacturing overhead $3.00
Fixed manufacturing overhead $1.00
Total Cost $12.00

The fixed overhead costs are unavoidable.

Assume Cruise Company can purchase 6300 units of the part from Suri Company for $14.20 each, and the facilities currently used to make the part could be used to manufacture 6300 units of another product that would have an $13 per unit contribution margin. If no additional fixed costs would be incurred, what should Cruise Company do?

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Cruise Company produces a part that is used in the manufacture of one of its products. The unit manu...

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