Sunny Enterprises makes a component that ii s used in the ese of radios, the companys main
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Sunny Enterprises makes a component ‘that ii s used in the ese of radios, the company’s main product. For the component, the variable costs per unit are \($18.\) Razor Edge Products wants to sell Sunny 10,000 units of the component for \($22\) per unit. Sunny will be able to avoid \($30,000\) in fixed overhead costs if it chooses to purchase the component externally. What is the cost or benefit of purchasing the component from Razor Edge?
a. \($10,000\) benefit
b. \($10,000\) cost
c. \($40,000\) cost
d. \($70,000\) cost
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Accounting For Managers Interpreting Accounting Information For Decision Making
ISBN: 9781118037966
1st Canadian Edition
Authors: Paul M. Collier, Sandy M. Kizan, Eckhard Schumann
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