Maya Company currently buys a component part for $5 per unit. Maya estimates that making the part would require $2.30 per unit of direct materials and $1.10 per unit of direct labor. Maya normally applies overhead using a predetermined overhead rate of 210% of direct labor cost. Maya estimates incremental overhead of $0.60 per unit to make the part. 

(a) Prepare a make or buy analysis of costs for this part.

(b) Should Maya make or buy the part?

Answer rating: 100% (QA)

a Make or buy analysis of costs for the part 1 Cost of buying the component p... View the full answer