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Question: The Fox Company received an offer from an outside supplier of $76 per unit to purchase a part the…
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Show transcribed image text The Fox Company received an offer from an outside supplier of $76 per unit to purchase a part they currently manufacture for $80 per unit (per part). Currently the $80 cost per unit is based on: $40 direct materials, $20 direct labor, $8 variable overhead and $12 fixed overhead. The fixed overhead includes for the supervisor salary that is the only fixed cost traceable to manufacturing the part. Currently, the Fox Company produces 30,000 parts each year and there is adequate factory space to do so. What are the relevant costs, per unit, the Fox Company should consider in making the decision to make or buy the part from an outside supplier? a) $80 per unit b) $68 per unit c) $74 per unit d) $72 per unit e) $64 per unit

The Fox Company received an offer from an outside supplier of $76 per unit to purchase a part they currently manufacture for $80 per unit (per part). Currently the $80 cost per unit is based on: $40 direct materials, $20 direct labor, $8 variable overhead and $12 fixed overhead. The fixed overhead includes $4 for the supervisor salary that is the only fixed cost traceable to manufacturing the part. Currently, the Fox Company produces 30,000 parts each year and there is adequate factory space to do so. What are the relevant costs, per unit, the Fox Company should consider in making the decision to make or buy the part from an outside supplier? a) $80 per unit b) $68 per unit c) $74 per unit d) $72 per unit e) $64 per unit

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