Haver Company currently produces components RX5 for its sole product. The current cost per unit...
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Accounting
Haver Company currently produces components RX5 for its sole product. The current cost per unit to manufacture the required 50,000 units of RX5 follows:
direct material $ 5.00
direct labot $ 8.00
Overhead 9.00
Total cost per unit $ 22.00
Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offered to supply the RX5 for $18.00 per unit.
a) Determine whether the company should make or buy the RX5
b) what factors besides cost must managment consider when deciding whether to make it or buy the RX5
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