Craydye Corporation manufactures a part for its production cycle.The costs per unit for 8,000 units of this part are as follows:

Zinkyl Company has offered to sell Craydye Corporation 8,000 units of the part for $120 per unit.If Craydye Corporation accepts Zinkyl Company's offer, total fixed overhead will be reduced by $40,000.What alternative is more desirable and by what amount is it more desirable?
Alternative Amount
A) Make; $220,000
B) Make; $72,000
C) Buy; $188,000
D) Buy; $170,000

Question

Craydye Corporation manufactures a part for its production cycle.The costs per unit for 8,000 units of this part are as follows: ​
​
 Zinkyl Company has offered to sell Craydye Corporation 8,000 units of the part for $120 per unit.If Craydye Corporation accepts Zinkyl Company's offer, total fixed overhead will be reduced by $40,000.What alternative is more desirable and by what amount is it more desirable?
Alternative Amount
A) Make; $220,000 
B) Make; $72,000 
C) Buy; $188,000 
D) Buy; $170,000

Quizplus · Accepted Answer

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Craydye Corporation Manufactures a Part for Its Production Cycle