Nall Custom Pool Inc. needs 10,000 units of a certain part for its manufacturing process. It can buy the part from Wholesale Pool Supplies and Equipment for $53. Nall's plant can manufacture the part for the following costs per unit:
If Nall buys the part from Wholesale, 60 percent of the fixed manufacturing overhead applied will continue to be incurred.
Required:
What is the relevant dollar difference between making and buying the part?

Question

Nall Custom Pool Inc. needs 10,000 units of a certain part for its manufacturing process. It can buy the part from Wholesale Pool Supplies and Equipment for $53. Nall's plant can manufacture the part for the following costs per unit:
  If Nall buys the part from Wholesale, 60 percent of the fixed manufacturing overhead applied will continue to be incurred.
Required:
What is the relevant dollar difference between making and buying the part?

Quizplus · Accepted Answer

The Answer of Nall Custom Pool Inc. needs 10,000 units of a certain part for its manufacturing process. It can buy the part from Wholesale Pool Supplies and Equipment for $53. Nall's plant can manufacture the part for the following costs per unit:
  If Nall buys the part from Wholesale, 60 percent of the fixed manufacturing overhead applied will continue to be incurred.
Required:
What is the relevant dollar difference between making and buying the part?