What is the benefit of making of buying the components

Reference no: EM132782344

Cirrus Company has calculated that the cost to make a component is made up of materials, $120; variable labour, $60; variable overhead, $30; and fixed overhead, $25. Another company has offered to make the component for $140.

Problem 1: If Cirrus has spare capacity and wants to retain its skilled labour force, what is the benefit of making of buying the components?

Select one:

a. $10 benefit to buy the component

b. $20 benefit to make the component

c. $10 benefit to make the component

d. $40 benefit to buy the component

Reference no: EM132782344

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