Question: The cost to Swank Company of manufacturing 20 000 units of
The cost to Swank Company of manufacturing 20,000 units of a particular part is $255,000, of which $100,000 is fixed and $155,000 is variable. The company can buy the part from an outside supplier for $8 per unit. Fixed costs will remain the same regardless of Swank’s decision. Should the company buy the part or continue to manufacture it? Prepare a comparative schedule in the format illustrated in Exhibit 21–6.
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