Rockford Company manufactures a part for use in its production of hats. When 10,000 items...
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Rockford Company manufactures a part for use in its production of hats. When 10,000 items are.23 produced, the costs per unit are Direct materials $0.75 Direct manufacturing labor 3.00 Variable manufacturing overhead 1.50 Fixed manufacturing overhead 1.60 Total $6.85 Angel Company has offered to sell to Rockford Company 10,000 units of the part for $6.00 per unit. The plant facilities could be used to manufacture another item at a savings of $9.000 if Rockford accepts the offer. In addition $1.00 per unit of fixed manufacturing overhead on the original item would be eliminated ? Which alternative is best for Rockford Company? Buy(1) or make (2)
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