Question: GlowShell can make 5,000 robots with the following costs: Direct Materials $74,000 Direct Labour 30,000 Variable Overhead 23,000 Fixed Overhead 15,000 The company can purchase

GlowShell can make 5,000 robots with the following costs:

Direct Materials $74,000

Direct Labour 30,000

Variable Overhead 23,000

Fixed Overhead 15,000

The company can purchase the 5,000 robots externally for $145,000. GlowShell can produce other products and generate an additional $15,000 income if the units are purchased externally. Should the company purchase externally?

Select one:

a.yes since the company can save $12,000 cost

b.no since the company cost $12,000 more to make in house

c.no since the company cost $3,000 more to make in house

d.yes, since the company can save $3000 cost

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