Exercise 23-4 Make or buy decision LO A1 Gilberto Company currently manufactures 50,000 units per year of one of its crucial parts. Variable costs are $2.40 per unit, fixed costs related to making this part are $50,000 per year, and allocated fixed costs are $55,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.60 per unit guaranteed for a three-year period.
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Home » Business » Exercise 23-4 Make or buy decision LO A1 Gilberto Company currently manufactures 50,000 units per year of one of its crucial parts. Variable costs are $2.