Unicorn Magic manufactures a part for use in its production of stuffed toys. Wh

Unicorn Magic manufactures a part for use in its production of stuffed toys. When 10000 items are produced the costs per unit are:
Direct materials $0.60
Direct manufacturing labour 3.00
Variable manufacturing overhead 1.20
Fixed manufacturing overhead 1.60
Total $6.40Triike Company has offered to sell to Unicorn Magic 10000 units of the part for $6.00 per unit. The plant facilities could be used to manufacture another item at a savings of $9000 if Unicorn Magic accepts the offer. In addition $1.
Question OneUnicorn Magic manufactures a part for use in its production of stuffed toys. When 10000 items are produced the costs per unit are:
Direct materials $0.60
Direct manufacturing labour 3.00
Variable manufacturing overhead 1.20
Fixed manufacturing overhead 1.60
Total $6.40Triike Company has offered to sell to Unicorn Magic 10000 units of the part for $6.00 per unit. The plant facilities could be used to manufacture another item at a savings of $9000 if Unicorn Magic accepts the offer. In addition $1.00 per unit of fixed manufacturing overhead on the original item would be eliminated.
Required:
Which alternative (make or buy) is best for Unicorn Magic? Why? Question OneUnicorn Magic manufactures a part for use in its production of stuffed toys. When 10000 items are produced the costs per unit are:
Direct materials $0.60
Direct manufacturing labour 3.00
Variable manufacturing overhead 1.20
Fixed manufacturing overhead 1.60
Total $6.40Triike Company has offered to sell to Unicorn Magic 10000 units of the part for $6.00 per unit. The plant facilities could be used to manufacture another item at a savings of $9000 if Unicorn Magic accepts the offer. In addition $1.00 per unit of fixed manufacturing overhead on the original item would be eliminated.
Required:
Which alternative (make or buy) is best for Unicorn Magic? Why?
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