kim company currently makes a part used in the production 269446

Kim Company currently makes a part used in the production of its best selling product. Kim has the option to buy this same part from a supplier for $50 per part. Kim uses 800 of these parts each period and has the following cost data for producing these 800 parts:

Cost per Unit

Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15

Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Variable manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Fixed manufacturing overhead, direct* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Fixed manufacturing overhead, indirect* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

* Based on 800 units per period. If the parts are purchased from the supplier, the direct fixed manufacturing overhead costs can be avoided.

Should Kim buy the 800 parts per period from the supplier or continue to make them?