Finance question

The Bridgeport Company manufactures 5,900 units of a part that could
be purchased from an outside supplier for $16 each. Bridgeport’s costs to manufacture each part are as follows:

Direct materials$4
Direct labor 3
Variable manufacturing overhead 6
Fixed manufacturing overhead 10
Total $23

All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses.
(a-b)

(a) Calculate relevant cost to make.

Relevent cost to make $ per unit

(b) Should Bridgeport continue to manufacture the part?

Yes
No

Sample Solution

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