Solution-Should company buy if the vacated facilities are

Should company buy if the vacated facilities are rented out

Assignment Help Cost Accounting

Reference no: EM132583086

A vendor has offered to supply a component for $38 (FOB destination) that has previously been manufactured internally.

Per unit

DM $18

DL 6

Variable overhead 3

Fixed Overhead 4

Total cost $31

Question 1: Suppose fixed costs cannot be avoided if the component is purchased from outside. Should the company make or buy if the vacated facilities are:

a. left idle?

b. Used for other purpose which generates net benefit of Br. 10,000?

c. Rented out for Br. 15,000

Reference no: EM132583086

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Should company buy if the vacated facilities are rented out

Reference no: EM132583086

Reference no: EM132583086

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