Question
Aldean Company makes 200,000 units per year of a part called U67 for use in one of its products. Data concerning the unit production
Aldean Company makes 200,000 units per year of a part called U67 for use in one of its products. Data concerning the unit production costs of the U67 is as follow: Direct materials $0.20 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing cost per unit 0.3 0.13 0.24 $0.62 An outside supplier has offered to sell Aldean Company all of the U67 it requires. If Aldean Company decided to discontinue making the U67, 30% of the above fixed manufacturing overhead costs could be avoided. Required: Assume Aldean Company has no alternative use for facilities that are now being used to produce
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