Does the company must make the piece or buy

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Reference no: EM13864290

Solve the following year. You should do the same in MS Excel, showing all steps to resolve it and then send the file for the platform. Points will be provided by the process. If only samples the result will not get score.

Radisson Manufacturing Corp. The company uses 10,000 units of the 300th piece as a component to assemble one of its products. The cost of internally produced this piece is $ 18 per unit, calculated as follows:

Direct materials $ 45,000

Direct labor 50,000

Variable overhead 40,000

45,000 Fixed overhead

Total cost $ 180,000

An external supplier offers to supply this piece for $ 16 per unit. If the company stops production of this piece, you can avoid 1/3 of fixed overhead costs. Does the company must make the piece or buy? It shows the computations for each option and indicates what your decision.

Reference no: EM13864290

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