Durango Company Manufactures Several Products,one of Which Is a Western

Essay

Durango Company manufactures several products,one of which is a western style saddle.Total production costs for 5,000 saddles are as follows:
Durango has been approached by a supplier who will sell the same saddle to Durango for $1,100 per saddle.Assume that Durango could rent its manufacturing facilities for $350,000 per year.Should Durango continue to make the saddle or should they buy the saddles? Explain the basis of your decision.