Cummings Company has been purchasing bottles for its product at a cost of $50.The cost to produce comparable bottles is expected to be $24 for direct material and $16 for direct labour.If Cummings makes the bottles,fixed overhead cost will not increase and variable factory overhead costs associated with the cases are expected to be 20% of direct materials costs.
Should Cummings make or buy the bottles?

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The Answer of Cummings Company has been purchasing bottles for its product at a cost of $50.The cost to produce comparable bottles is expected to be $24 for direct material and $16 for direct labour.If Cummings makes the bottles,fixed overhead cost will not increase and variable factory overhead costs associated with the cases are expected to be 20% of direct materials costs.
Should Cummings make or buy the bottles?

Cummings Company Has Been Purchasing Bottles for Its Product at a Cost