Exercise & Your Company makes 4800 units of a component part. At this level of activity,...

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Exercise & Your Company makes 4800 units of a component part. At this level of activity, the cost per part is: Direct materials $4.00 Direct labor $2.00 Variable manufacturing overhead $3.00 Fixed manufacturing overhead $7.00 Total cost per part $16.00 An outside supplier has offered to sell the parts to Your Co. for $14 each. If Your Co. accepts this offer, it will be able to increase production of another product and earn an additional $7680 profit. Of the fixed manufacturing overhead, 70% is allocated and 30% direct. Complete the following table to determine whether you should make or buy the part. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Purchase price Opportunity cost Total cost What is the difference in cost? Should you make or buy the part? Make Buy X X X X X X X X X X X X X X X X Exercise & Your Company makes 4800 units of a component part. At this level of activity, the cost per part is: Direct materials $4.00 Direct labor $2.00 Variable manufacturing overhead $3.00 Fixed manufacturing overhead $7.00 Total cost per part $16.00 An outside supplier has offered to sell the parts to Your Co. for $14 each. If Your Co. accepts this offer, it will be able to increase production of another product and earn an additional $7680 profit. Of the fixed manufacturing overhead, 70% is allocated and 30% direct. Complete the following table to determine whether you should make or buy the part. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Purchase price Opportunity cost Total cost What is the difference in cost? Should you make or buy the part? Make Buy X X X X X X X X X X X X X X X X