The cost to Swank Company of manufacturing 20,000 units of a particular part is $255,000, of which $100,000 is fixed and $155,000 is variable. The company can buy the part from an outside supplier for $8 per unit. Fixed costs will remain the same regardless of Swank€™s decision. Should the company buy the part or continue to manufacture it? Prepare a comparative schedule in the format illustrated in Exhibit 21€“6.
In Exhibit21€“6.

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Make the Part Buy the Incremental Part Analysis Manufacturing costs for 10,000 units Direct materials..- . Direct labor. Variable overhead Fixed overhead $ 8,000 12,500 9,000 2,500 50,000 (50,000) $60,000 $78,000 $(18,000) 8,000 12,500 10,000 $1,000 29,500 27,000 Purchase price of part, $5 per unit Total cost to acquire part