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Because the Rbber Division sustained a loss, the president avoided if the division was dropped. None of the allocated common corporate fixed costs could be

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Because the Rbber Division sustained a loss, the president avoided if the division was dropped. None of the allocated common corporate fixed costs could be avoided If the Rubber Division was dropped at the beginning of last year, the financial advantage (disadvantage) to the company for the year would have been t of Vanik is considering the elimination of this division. All of the division's traceable fixed costs could be Multiple Choice ($20,000) $20,000 $25,000 $25.000 Zouar Computer Corporation currently manufactures the disk drives that it uses in its c omputers. The costs to produce 5,000 of these disk drives last year were as follows per drive $12 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total $26 Kidal Electronics has offered to provide Zouar with all of its disk drive needs for $27 per drive. If Zouar accepts this offer, Zouar will be able to use the freed up space to generate an additional $40.000 of Income each year to produce more of its computer keyboards Only $3 per drive of the fixed manufacturing overhead cost above could be avolded. Direct labor is an avoidable cost in this decision. Based on this information, would Zouar be financialy better off making the drives or buying the drives and by how much? $15,000 better to buy $20,000 better to buy $35,000 better to buy $60,000 better to make

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