Sheridan, Inc. currently manufactures a wicket as its main product. The costs per unit are as follows:
Direct materials and direct labor $13
Variable overhead 5
Fixed overhead 8
Total $26
Saran Company has contacted Sheridan with an offer to sell it 5900 of the wickets for $20 each. If Sheridan makes the wickets, variable costs are $18 per unit. Fixed costs are $8 per unit; however, $5 per unit is unavoidable.
Should Sheridan make or buy the wickets?
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Home » Business » Sheridan, Inc. currently manufactures a wicket as its main product. The costs per unit are as follows: Direct materials and direct labor $13 Variable overhead 5 Fixed overhead 8 Total $26 Saran Company has contacted Sheridan with an offer to sell it