Answer:
Accepted
Explanation:
In this question, we have to compare the make or buy options which are shown below:
Particulars Make Buy
Direct materials (5,000 units × $1) $5,000
Direct labor (5,000 units × $10) $50,000
Variable manufacturing overhead
(5,000 units × $5) $25,000
Fixed manufacturing overhead $60,000 $110,000 (5,000 units × $22)
Total $140,000 $110,000
Since in buy decision, the cost is minimum. So, the company should accept this offer
