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7 Stuart Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,400 containers
7 Stuart Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,400 containers follows. Unit-level materials $ 6,900 Unit-level labor 6,400 Unit-level overhead 3,500 02:59:13 Product-level costs* 8,700 Allocated facility-level costs 26,400 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Stuart for $2.60 each. Required a. Calculate the total relevant cost. Should Stuart continue to make the containers? b. Stuart could lease the space it currently uses in the manufacturing process. If leasing would produce $11,300 per month, calculate the total avoidable costs. Should Stuart continue to make the containers? a. Total relevant cost Should Stuart continue to make the containers? b. Total avoidable cost Should Stuart continue to make the containers?
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