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Beta Inc. is currently making one of its components. Its annual requirements are 20,000 units. The variable cost per unit is $10 and the fixed
Beta Inc. is currently making one of its components. Its annual requirements are 20,000 units. The variable cost per unit is $10 and the fixed cost per unit is $10. Included in this fixed cost is the $75,000 salary of the factory supervisor, which would continue to be paid even if the components were purchased. Creto Inc. has offered to supply Beta with 20,000 units for $16 per unit. What is the dollar advantage or disadvantage to making the components? Select one: O $5,000 advantage O none of these O $80,000 disadvantage O $5,000 disadvantageAlpha Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 60,000 units per year is as follows: Direct materials $10.00 Direct labour 3.00 Variable manufacturing overhead 2.00 Fixed manufacturing overhead 4.00 Variable selling and administrative expenses 2.00 Fixed selling and administrative expenses 3.00 The normal selling price is $ 30 per unit. The company's capacity is 75,000 units per year. An order has been received from a mail-order house for 10,000 units at $25 per unit. If Delta accepts the special order by how much will profits increase? Select one: O $10,000 O $80,000 O $250,000
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