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Question Content Area Benjamin Company incurred the following unit manufacturing costs for the product: ...

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Accounting

  1. Question Content Area

    Benjamin Company incurred the following unit manufacturing costs for the product:

    Direct materials $10
    Direct labor 3
    Variable overhead 2
    Fixed overhead 4

    Benjamin uses 150,000 units per year. Brazel Company has offered to sell Benjamin 150,000 units per year for $18. Fixed overhead is unavoidable. Should Benjamin make or buy the part?

    It should buy the part because it will save $150,000 over making it. It should buy the part because it will save $450,000 over making it. It should make the part because it will save $150,000 over buying it. It should make the part because it will save $450,000 over buying it.

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