Waiters, Inc. has been manufacturing
10,000 units of part 2050 per month, which is used in manufacturing
one of its products. At this level of production, the cost per unit
to manufacture part 2050 follows:
Direct
materials
$10.00
Direct
labor
25.00
Variable
overhead
13.00
Fixed
overhead
12.00
Total
$60.00
Westbrook Company has offered the sell
Waiters 10,000 units of part 2050 for $55 a unit. Waiters has
determined that it could use the facilities presently...