Harris Company currently produces a component that it uses in making some of its products. Harris has calculated the following costs for making the component:
$\begin{array}{lr}
\text { Unst-level costs }\\
\text { Materials } & \$ 20 \
\text { Labor } & 28 \
\text { Overhead } & 2 \
\text { Allocated facility-level costs } & 10 \
\text { Total cost } & \$ 60
\end{array}$ Harris is considering outsourcing the component. A supplier has offered to sell the component to Harris for $52 each. Harris needs 8,000 units each year.Required:Should Harris outsource the component? Support your answer with appropriate computations.

Question

Harris Company currently produces a component that it uses in making some of its products. Harris has calculated the following costs for making the component:
 $\begin{array}{lr}
\text { Unst-level costs }\\
\text { Materials } & \$ 20 \
\text { Labor } & 28 \
\text { Overhead } & 2 \
\text { Allocated facility-level costs } & 10 \
\text { Total cost } & \$ 60
\end{array}$ Harris is considering outsourcing the component. A supplier has offered to sell the component to Harris for $52 each. Harris needs 8,000 units each year.Required:Should Harris outsource the component? Support your answer with appropriate computations.

Quizplus · Accepted Answer

The Answer of Harris Company currently produces a component that it uses in making some of its products. Harris has calculated the following costs for making the component:
 $\begin{array}{lr}
\text { Unst-level costs }\\
\text { Materials } & \$ 20 \
\text { Labor } & 28 \
\text { Overhead } & 2 \
\text { Allocated facility-level costs } & 10 \
\text { Total cost } & \$ 60
\end{array}$ Harris is considering outsourcing the component. A supplier has offered to sell the component to Harris for $52 each. Harris needs 8,000 units each year.Required:Should Harris outsource the component? Support your answer with appropriate computations.

Harris Company Currently Produces a Component That It Uses in Making