Question
5. An outside manufacturer has offered to produce Bits and ship them directly to Ovation's customers. If Ovation Company accepts this offer, the facilities
5. An outside manufacturer has offered to produce Bits and ship them directly to Ovation's customers. If Ovation Company accepts this offer, the facilities that it uses to produce Bits would be idle; however, fixed manufacturing overhead costs would be reduced by 75%. Since the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their current amount. Compute the unit cost that is relevant for comparison to the price quoted by the outside manufacturer. (Do not round your intermediate calculations. Round your answer to 2 decimal places.) Total avoidable unit cost
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