Winston Corporation currently makes Part # 600, used in its manufacturing of engines. At 15,000 units,...

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Winston Corporation currently makes Part # 600, used in its manufacturing of engines. At 15,000 units, the total cost of making Part # 600 is $97,000, computed as follows: Direct Labor = $15,000 ($1 per unit) Direct Materials = $30,000 ($2 per unit) Variable Overhead = $12,000 ($0.80 per unit) Fixed Overhead = $40,000 An outside vendor has offered to supply Winston with 15,000 units of Part # 600 for $53,000. If the company accepts the offer, its fixed overhead costs will be reduced by $3,000. 1. If Winston buys the parts instead of continuing to manufacture them, it will save $____ 2. At a total purchase price of $________, the company would be indifferent between making or buying 15,000 units of the part. (Hint: The amount must be more than the current purchase price of $53,000.) Please show work with the answer! Winston Corporation currently makes Part # 600, used in its manufacturing of engines. At 15,000 units, the total cost of making Part # 600 is $97,000, computed as follows: Direct Labor = $15,000 ($1 per unit) Direct Materials = $30,000 ($2 per unit) Variable Overhead = $12,000 ($0.80 per unit) Fixed Overhead = $40,000 An outside vendor has offered to supply Winston with 15,000 units of Part # 600 for $53,000. If the company accepts the offer, its fixed overhead costs will be reduced by $3,000. 1. If Winston buys the parts instead of continuing to manufacture them, it will save $____ 2. At a total purchase price of $________, the company would be indifferent between making or buying 15,000 units of the part. (Hint: The amount must be more than the current purchase price of $53,000.) Please show work with the answer!

Answer rating: 100% (QA)

Answer 1 Differential cost per part Total Differential C... View the full answer