Peluso Company a manufacturer of snowmobiles is operating

Peluso Company a manufacturer of snowmobiles is operating at 70 of plant capacity Pelusos plant manager is considering making the headlights now being purchased from an outside supplier for 11 each The Peluso plant has idle equipment that could be used to manufacture the headlights The design engineer estimates that each headlight requires 4 of direct materials 3 of direct labor and 600 of manufacturing overhead Forty percent of the manufacturing overhead is a fixed cost that would be unaffected