Question: A vendor has offered to supply a component for $38 (FOB destination) that has previously been manufactured internally. Per unit DM $18 DL6 Variable overhead3

A vendor has offered to supply a component for $38 (FOB destination) that has previously been manufactured internally.

Per unit

DM $18

DL6

Variable overhead3

Fixed Overhead4

Total cost$31

Suppose fixed costs cannot be avoided if the component is purchased from outside. Should the company make or buy if the vacated facilities are:

a.left idle?

b.Used for other purpose which generates net benefit of $ 10,000?

c. Rented out for $15,000

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