Fixed costs Assignment | College Homework Help

Make or Buy Harper Company incurs a total cost of $234,000 in producing 18,000 units of a component needed in the assembly of its major product. The component can be purchased from an outside supplier for $6 per unit. A related cost study indicates that the total cost of the component includes fixed costs equal to 80% of the variable costs involved a. Should Harper buy the component if it cannot otherwise use the released capacity? Present your answer in the form of differential analysis, Use negative sign represent a net disadvantage answer, otherwise do not use negative signs with your answers. Cost from outside supplier Variable costs avoided by purchasing Net advantage disadvantage to purchase alternatives b. What would be your answer to requirement (a) if the released capacity could be used in a project that would generate $13.500 of contribution margin? Use negative sign represent a net disadvantage answer, otherwise do not use negative signs with your answers. Cost from outside supplier Variable costs avoided by purchasing Contribution margin generated by new project Net advantage disadvantage) to purchase alternative $ 0