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Guthrie Generators manufactures a solenoid that it uses in several of its products. Management is...

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Accounting

Guthrie Generators manufactures a solenoid that it uses in several of its products. Management is considering whether to continue manufacturing the solenoids or to buy them from an outside source. The following information is available:
The company needs 20,000 solenoids per year. The solenoids can be purchased from an outside supplier at a cost of $15 per unit.
The unit cost of manufacturing the solenoids is $20, computed as follows:
Direct materials
Direct labor $180,000
Factory overhead: 40,000
Variable 80,000
Fixed
Total manufacturing costs
Cost per unit unit's
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