Daily Kneads, Inc., is thinking about having one of its products made by a supplier. The...

 

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Daily Kneads, Inc., is thinking about having one of its products made by a supplier. The supplier will charge $6,000 for 1,000 units. Currently, Daily Kneads' costs to make 1,000 units of this product are as follows: Cost per unit $4 $1 Direct labor Direct materials Allocated unavoidble overhead $2 Total costs $7 Should the product be outsourced? Cost of 1,000 units $4,000 $1,000 $2,000 $7,000 Daily Kneads, Inc., is thinking about having one of its products made by a supplier. The supplier will charge $6,000 for 1,000 units. Currently, Daily Kneads' costs to make 1,000 units of this product are as follows: Cost per unit $4 $1 Direct labor Direct materials Allocated unavoidble overhead $2 Total costs $7 Should the product be outsourced? Cost of 1,000 units $4,000 $1,000 $2,000 $7,000

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