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Wehner Company is currently manufacturing Part ABS-43 producing 55000 units annually. The part is used in the production of several products made by Wehner The cost per unit for ABS-43 is as follow

Wehner Company is currently manufacturing Part ABS-43, producing 55,000 units annually. The part is used in the production of several products made by Wehner. The cost per unit for ABS-43 is as follows:

Direct materials $47.95
Direct labor 10.80
Variable overhead 2.55
Fixed overhead 3.90
  Total $65.20

Of the total fixed overhead assigned to ABS-43, $16,500 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part ABS-43), and the remainder is common fixed overhead. An outside supplier has offered to sell the part to Wehner for $61.11. There is no alternative use for the facilities currently used to produce the part. No significant non-unit-based overhead costs are incurred.

Required:

1. Should Wehner Company make or buy Part ABS-43?
Wehner should - Select your answer -makebuyItem 1 the part. This will produce total cost savings of $ .

2. What is the maximum amount per unit that Wehner would be willing to pay to an outside supplier? Round your answer to the nearest cent.
$ per unit

May 21 2020 View more View Less

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