The Lawn Corporation Produces a Part That Is Used in the Manufacture

question 60

Multiple Choice

The Lawn Corporation produces a part that is used in the manufacture of one of its products.The costs associated with the production of 10,000 units of this part are as follows:

The managerial accountant reported that $50,000 of the fixed factory overhead was avoidable.
The manager at Rapid Manufacturing Company offered to sell 15,000 units of the same product to the manager at Lawn Corporation at $40 per unit.Assuming the plant is available,should the manager make or buy the product?

• A)Make the part to save $8 per unit.
• B)Buy the part to save $8 per unit.
• C)Make the part to save $20 per unit.
• D)Buy the part to save $20 per unit.
• E)Make the part to save $25 per unit.

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