which option is advantageous and by how much
Barbardy Company is introducing a new product. The managers are trying to decide whether to make one of its components or buy it from a supplier at a price of P320. The space that could be used to produce the component would have no other use. The following are the data to make the component.
Materials P 90
Labor 100
Variable manufacturing overhead 90
Fixed manufacturing overhead 130
Total 410
The estimate reflects 20,000 volume units of the component. Fixed manufacturing overhead consists of
Required: Determine which option is advantageous and by how much?
- Buy is advantageous by P800,000
- Make is advantageous by P800,000
- Buy is advantageous by P1,800,000
- Make is advantageous by P1,800,000
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