Cruise Company produces a part that is used in the manufacture of one of its...
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Accounting
Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 6,300 units, are as follows: Direct materials $4.40 Direct labor $4.30 Variable manufacturing overhead $3.30 Fixed manufacturing overhead $1.20 Total cost $13.20. They offer to sell 6,300 units of the same part to Cruise company for $14.30 per unit. All fixed cost are unavoidable but Cruise company can rent out the unused area for $12,000 if they were to purchase the part. What should Cruise company do.
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