Amman Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10.000 units of this part are as follows

Mollare logged in as 51014069016 LAUAL OL VANCED MANAGERIAL ACCOUNTING-1 B swered of 1.00 uestion Amman Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows: Direct materials $ 90,000 Direct labor 130.000 Variable factory overhead 60.000 Fixed factory overhead 140.000 Total costs $420.000 Of the fixed factory overhead costs. $60.000 is avoidable. Amman Company has offered to sell 10.000 units of the same part to Piels Corporation for $36 per unit Assuming there is no other use for the facilities Amman should Select one a buy the part as this would save the company s60 000 o make the part as this would save $6 per unit c buy the par as this would save so per unit d make the part, as this would save $2 per unit Next page