Coronados Manufacturing Company can make 100 units of a necessary component part with the following...
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Accounting
Coronados Manufacturing Company can make 100 units of a necessary component part with the following costs:
| Direct Materials | $120000 |
| Direct Labor | 23000 |
| Variable Overhead | 54000 |
| Fixed Overhead | 30000 |
If Coronados Manufacturing Company can purchase the component externally for $195000 and only $7000 of the fixed costs can be avoided, what is the correct make-or-buy decision?
a. Make and save $22000
b. Buy and save $9000
c. Buy and save $22000
d. Make and save $9000
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