Calculate the total relevant cost to make or buy timer units

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Reference no: EM131057950

(Part Level Submission) Henry Horticultural, Ltd., is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 40,520 timers, the company has calculated the following unit costs. Direct fixed costs include supervisory and clerical salaries and equipment depreciation. Direct materials $12 Direct labor 7 Variable manufacturing overhead 4 Direct fixed manufacturing overhead 10 (30% salaries, 70% depreciation) Allocated fixed manufacturing overhead 8 Total unit cost $41 Talbert Time Pieces has offered to provide the timer units to Henry at a price of $36 per unit. If Henry accepts the offer, the current timer unit supervisory and clerical staff will be laid off. Calculate the total relevant cost to make or buy the timer units.

Reference no: EM131057950

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