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Accounting

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Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 60,000 units of RX5 for $18.00 per unit. Required 1. Calculate the incremental costs of making and buying component R X5 Total incremental costs of: Making the units Buying the units 1,080,000 Cost to buy the units Variable overhead costs Total direct materials Total direct labor Total costs Should the company continue to manufacture the part, or should it buy the part from the outside supplier? 240,000 480,000 720,000$ 1,080,000 Make the units References eBook & Resources

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