Concord, Inc. currently manufactures a wicket as its main product. The costs per unit are...
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Accounting
Concord, Inc. currently manufactures a wicket as its main product. The costs per unit are as follows:
Direct materials and direct labor
$8
Variable overhead
5
Fixed overhead
8
Total
$21
Saran Company has contacted Concord with an offer to sell it 3100 of the wickets for $15 each. If Concord makes the wickets, variable costs are $13 per unit. Fixed costs are $8 per unit; however, $5 per unit is unavoidable. Should Concord make or buy the wickets?
Make; savings = $6200
Buy; savings = $3100
Buy; savings = $9300
Make; savings = $3100
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