MI Enterprise manufactures 30,000 units of mobile phone memory cards which is coded as MI2210. This is used in their production line. At the current level of activity, the cost per unit for MI2210 is: Direct Materials $4; Direct Labor $ 7.5; Variable Manufacturing Overhead; $ 2.5Fixed Manufacturing Overhead $ 10; Total cost per part $24. An outside supplier has offered to sell 30,000 units of this part to MI Enterprise for $20 per part. MI Enterprise has determined that two-thirds of fixed manufacturing overhead being applied to part MI2210 would continue even if part MI2210 were purchased from the outside supplier. Should the outside supplier’s order be accepted? Justify your answer.
MI Enterprise manufactures 30,000 units of mobile phone memory cards which is coded as MI2210. This is used in their production line. At the current level of activity, the cost per unit for MI2210 is: Direct Materials $4; Direct Labor $ 7.5; Variable Manufacturing
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