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Question: Creative Link 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 labor
18.50
Variable overhead
4.44
Fixed overhead
16.65
Total cost
$46.25
An outside supplier has offered to sell 55,500 units of cushions to Make-it-Work Ltd for $35 per cushion.
Required:
Prepare computations to show whether or not Make-it-Work should continue to make the cushions or accept the outside supplier's offer in excel file
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