Question: Can someone show me how I work on this? Please put correct answer in the underlined space provided. ABC Company uses a component 628 in
Can someone show me how I work on this?

Please put correct answer in the underlined space provided. ABC Company uses a component 628 in its production cycle. The following information is available: Number of G28 required 20,000 units Cost to produce G28 Direct materials $ 4.00 Direct labor 16.00 Variable overhead 8.00 Fixed overhead 10.00 If the company buys the part from a supplier instead of making it, the released facility will be idle. The plant manager estimates the following: Avoidable xed overhead 40% Purchase price of (328 $ 36.00 Required: a} Compute the operating income of the make option. (4 Marks} b) Compute the operation income of the buy option. (2 Marks) c) Should the company make or buy the component G28. (1 Mark)
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