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.

If the company makes the units, it will save $100,000.

Explanation:

Giving the following information:

Direct materials $8

Direct labor 2

Variable overhead 1

Number of units= 100,000

Buying= $12 per unit

As the fixed costs are unavoidable, should not be taken into account.

Total cost of production= (8 + 2 + 1)*100,000= $1,100,000

Total cost of buying= 12*100,000= $1,200,000

If the company makes the units, it will save $100,000.

a recipe serves 8 people, and calls for 5 lbs of apples and 2 cups of flour. you want to prepare it for 24 people. divide 24 by 8 to get 3, and then multiply your ingredients by 3.

so for 24 people, you'll need 15 lbs of apples, and 6 cups of flour.

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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