Assuming that a new product will generate a segment margin of $65,000 per year could be produced if the part were purchased, should the offer be accepted? Show computations.
- Per Part 15,000 parts per year
- Direct Materials: $6 $90,000
- Direct Labo 8 120,000
- Variable manufacturing 1 15,000
- overhead
- Fixed manufacturing
- overhead, traceable $5 75,000
- Fixed manufacturing
- overhead, common $10 150,000
- Total Cost $30 $450,000