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A corporation manufactures a sub-assembly HQ-101 for use in its major product. The costs per unit for 40,000 units of HQ-101 are as follows: Direct
A corporation manufactures a sub-assembly HQ-101 for use in its major product. The costs per unit for 40,000 units of HQ-101 are as follows: Direct materials P14 Direct labor 4 Variable overhead applied 8 Fixed overhead applied 11 Total unit cost P37 Fryman Suppliers has offered to manufacture 40,000 units of HQ-101 for C Corporation at a unit cost of P30. If C accepts the offer, it could eliminate P6 per unit of the fixed overhead cost. In addition, C could use the space in the production of another sub-assembly and save P70,000 in costs for that sub-assembly's operation. REQUIRED: 1. Format the relevant data and recommend a decision to C Corporation. 2. What factors other than the quantitative analysis does C Corporation need to consider
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