Brio Company Produces a Part That Is Used in the Manufacture

question 45

Essay

Brio 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 6,000 units, are as follows:
$\begin{array}{|l|r|}\hline \text { Direct materials } & \$ 5 \\\hline \text { Direct labor (variable cost) } & 6 \\\hline \text { Variable manufacturing overhead } & 3 \\\hline \text { Fixed manufacturing overhead } & \underline{4} \\\hline \text { Total cost } & \$ 18 \\\hline\end{array}$ Fine Company has offered to sell 6,000 units of the same part to Brio Company for $17.50 per unit. Assuming the company has no other use for its facilities and that the fixed manufacturing costs are unavoidable. What should Brio Company do?

---

Definitions:

Unwelcome Physical Contact

Physical interaction that is not consented to and is perceived as inappropriate or harassing by the recipient.

Hostile Environment

A work or social situation that is intimidating, unfriendly, or offensive, especially due to discrimination or harassment.

Managers and Coworkers

The relationship dynamics and interactions between supervisory personnel (managers) and the employees (coworkers) they oversee.

Customers

Individuals or organizations that purchase goods or services from a business, playing a crucial role in the success and sustainability of the business.