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Bovee Company Manufactures a Part for Its Production Cycle

Question 77

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Bovee Company manufactures a part for its production cycle. The costs per unit for 10,000 units of this part are as follows:
Bovee Company manufactures a part for its production cycle. The costs per unit for 10,000 units of this part are as follows:    The fixed factory overhead costs are unavoidable. -Assume that Bovee can buy 10,000 units of the part from another producer for $120 each. The facilities currently used to make the part could be rented out to another manufacturer for $160,000 a year. Bovee should A)  buy the part as that would save $24 per unit. B)  buy the part as that would save $4 per unit. C)  make the part as that would save $24 per unit. D)  make the part as that would save $8 per unit. The fixed factory overhead costs are unavoidable.
-Assume that Bovee can buy 10,000 units of the part from another producer for $120 each. The facilities currently used to make the part could be rented out to another manufacturer for $160,000 a year. Bovee should


A) buy the part as that would save $24 per unit.
B) buy the part as that would save $4 per unit.
C) make the part as that would save $24 per unit.
D) make the part as that would save $8 per unit.

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