Zurich Manufacturing incurs unit costs of ($8.50) (($5.50) variable and ($3) fixed) in making a subassembly part

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Zurich Manufacturing incurs unit costs of \($8.50\) (\($5.50\) variable and \($3\) fixed) in making a subassembly part for its Finished product. A supplier oilers to make 10.000 of the assembly part at \($5\) pet unit. II the offer is accepted, Zurich will save all variable costs but no Fixed costs. Prepare an analysis showing the total cost saving, if any, Zurich will realize by buying the part.

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Managerial Accounting Tools For Business Decision Making

ISBN: 9780471413653

2nd Canadian Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly

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