Zaman Co
Subject:AccountingPrice: Bought3
Zaman Co. is now producing Product X. The company's accounting department reports the following costs of producing 50,000 units of the product X each year: Direct Materials $2 Direct Labor $1 Variable Overhead $1 Fixed cost $ 1.75* (Expected 50% will save if the company will buy from the outside supplier) An outside supplier from China offered to sell 50,000 units to Zaman Co. at a price of only $5 each. Instructions: 4 Page Instructions: 4 Page Should the company stop producing the product X internally or buy them from the outside supplier? (show your calculation)
