The company must decide whether to continue making the

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Reference no: EM13571577

Listed below are a company's monthly unit costs to manufacture and market a product.

Manufacturing costs

Direct Materials $ 2.00

Direct Labor $ 2.40

Variable Overhead $ 1.60

Fixed Overhead $ 1.00

Marketing Costs

Variable $ 2.50

Fixed $ 1.50

The company must decide whether to continue making the product or buy it form an outside supplier. The supplier has offered to make the product at the level of quality the company expects. Marketing costs will not be affected if the company outsources the product. What is the maximum amount per unit the company can pay the supplier without decreasing its operating income?

Reference no: EM13571577

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