The Crown Company must decide whether to make or buy part 128PC. Although Crown's idle equipment could be used to produce up to 10,000 units of the part, the company presently needs only 7,000 units. The following shows the estimated cost of making part 128PC. Reuten Company will sell part 128PC to the Crown Company for $20 per unit.
Required: Determine whether Crown should make or buy the part, and explain why.

Question

The Crown Company must decide whether to make or buy part 128PC. Although Crown's idle equipment could be used to produce up to 10,000 units of the part, the company presently needs only 7,000 units. The following shows the estimated cost of making part 128PC.  Reuten Company will sell part 128PC to the Crown Company for $20 per unit.
Required: Determine whether Crown should make or buy the part, and explain why.

Quizplus · Accepted Answer

The Answer of The Crown Company must decide whether to make or buy part 128PC. Although Crown's idle equipment could be used to produce up to 10,000 units of the part, the company presently needs only 7,000 units. The following shows the estimated cost of making part 128PC.  Reuten Company will sell part 128PC to the Crown Company for $20 per unit.
Required: Determine whether Crown should make or buy the part, and explain why.

The Crown Company Must Decide Whether to Make or Buy