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1. The Company makes 1,000 units per year of a part it uses in the products it manufactures The unit product cost of this part
1. The Company makes 1,000 units per year of a part it uses in the products it manufactures The unit product cost of this part is computed as folows Direct materials Direct labor Variable manufacturing overhead $2 Fixed manufacturing overhead 20 Unit product cost $ 15 $18 $55 offered to sell the company all of units it needs at $58 per unit, M the he part could be used to company accepts this offer, the facilities now being used to make t 00 units of a product that has a contribution margin of $7 per unit and no new fixed d from the outside supplier, $10 of the fixed manufacturing osts. If the part was purchase overhead cost being applied to the part would be eliminated. l impact to the company's profit if the company buys the part from the supplier instead of making them? a) $8,000 decrease b) $11,000 increase c) $1,000 increase d) $3,000 decrease e) $13,000 decrease
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