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Calculate relevant cost to make

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Reference no: EM133075800

Question - The Blue Spruce Company manufactures 5,700 units of a part that could be purchased from an outside supplier for $16 each. Blue Spruce's costs to manufacture each part are as follows:

Direct materials $4

Direct labor 3

Variable manufacturing overhead 6

Fixed manufacturing overhead 10

Total $23

All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses.

(a) Calculate relevant cost to make.

(b) Should Blue Spruce continue to manufacture the part?

Reference no: EM133075800

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