Prepare computations to show whether or not make-it-work

Reference no: EM133337038

Question: Make-it-Work Ltd manufactures 55,500 units of cushions for use in its production line. At this level of activity, the cost per unit of cushion is as follows: Direct materials $6.66 Direct labour 18.50 Variable overhead 4.44 Fixed overhead 16.65 Total cost per cushion $46.25 An outside supplier has offered to sell 55,500 units of cushions to Make-it-Work Ltd for $35 per cushion.

Prepare computations to show whether or not Make-it-Work should continue to make the cushions or accept the outside supplier's offer.

All workings must be shown for full marks.

Reference no: EM133337038

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