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Beal company currently manufactures a subassembly for its

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Beal Company currently manufactures a subassembly for its main product. The costs per unit are as follows: Direct materials $ 2 Direct labor 20 Variable overhead 10 Fixed overhead 16 Total $48 Pell, Inc. has contacted Beal with an offer to sell it 5,000 of the subassemblies for $36 each. If Beal makes the subassemblies, $6 of the fixed overhead per unit will be allocated to other products.

Instructions:  Should Beal make or buy the subassemblies? Explain your answer.

Reference no: EM13605569

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