1. Time Company needs 1,000 engines for its automobile manufacturing. You can buy the motors from Shelly Motors for $1,250 each. Time's plant can manufacture the engines for the following costs per unit: 
2. 
   
3. Direct materials $500
4. Direct manufacturing labor 250
5. Variable manufacturing overhead 200 
6. Fixed manufacturing overhead 350 
7. Total $1,300 
8. 
   
9. If Time buys the engines from Shelly, 70 % of fixed manufacturing overhead applied not avoided. Should the company make or buy the motors?

Answer rating: 100% (QA)

To determine whether Time Company should make or buy the motors we need to compare the total costs o... View the full answer