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Question - Assume that HASF furniture Inc., as described, currently purchases the chair cushions for its lawn set from an outside vendor for $30 per set. Modern Furniture's chief operations officer wants an analysis of the comparative costs of manufacturing these cushions to determine whether bringing the manufacturing in-house would save the firm money. Additional information shows that if Modern furniture's were to manufacture the cushions, the materials cost would be $16 and the labor cost would be $10 per set and that it would have to purchase cutting and sewing equipment, which would add $25,000 to annual fixed costs.
Required - Computation for 10,000 units
What amount should have been inccrued if company produce 10,000 units?
What amount should have been inccrued if company purhcase 10,000 units from outside
What amount company save if company make 10,000 cushion?
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