Cruise Company Produces a Part That Is Used in the Manufacture

question 13

Multiple Choice

Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 6100 units, are as follows:
Suri Company has offered to sell 6100 units of the same part to Cruise Company for $14.40 per unit. Assuming the company has no other use for its facilities, what should Cruise Company do?

• A)Make the part and save $2.70 per unit.
• B)Make the part and save $5.70 per unit.
• C)Buy from Suri and save $1.20 per unit.
• D)Make the part and save $10.20 per unit.

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