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2. The Sacramento Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 35,000 units of Part No.
2. The Sacramento Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 35,000 units of Part No. 498 is as follows: (Click to see the manufacturing cost per unit.) For Sacramento to achieve an overall savings of $20,000, the amount of relevant costs that would have to be saved by using the released facilities in the manufacture of Part No. 575 would be which of the following: (a) $175,000, (b) $195,000, (c) $125,000 or (d) $350,000 ? Show your calculations. What other factors might Sacramento consider before outsourcing to Counter? Begin by selecting the labels to calculate the relevant costs that would have to be saved and then enter in the supporting calculations. Data table The Counter Company has offered to sell 35,000 units of Part No. 498 to Sacramento for $74 per unit. Sacramento will make the decision to buy the part from Counter if there is an overall savings of at least $20,000 for Sacramento. If Sacramento accepts Counter's offer, $8 per unit of the fixed overhead allocated would be eliminated. Furthermore, Sacramento has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 575
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