The Harbor Company currently makes 10,000 bolts per year for $50,000 in total manufacturing costs. The Cove
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The Harbor Company currently makes 10,000 bolts per year for $50,000 in total manufacturing costs. The Cove Corporation has offered to sell Harbor the bolts for $4.00 apiece. Harbor has the following cost structure:
Upon further analysis, Harbor notes that the company can eliminate the services of a $15,000 per year supervisor accounted for in fixed factory overhead if they elect to buy from Cove. Harbor's decision to make or buy would result in a comparison of the purchase price of $40,000 to a production cost will be_______________.
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