Fischer Company uses 12,000 units of a part in its production process. The costs to make

a part are: direct material, $15; direct labor, $27; variable overhead, $15; and applied

fixed overhead, $32. Heath has received a quote of $60 from a potential supplier for this

part. If Fischer buys the part, 75 percent of the applied fixed overhead would continue.

Will the company be better off by making or buying the parts and by what margin?

Answer rating: 100% (QA)

To determine whether Fischer Company should make or buy the parts we can calculate the total cost of ... View the full answer