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Company manufactures an intermediate product as W1. Variable manufacturing costs per unit of W1 are as follows: Direct materials $5 Direct labor $15 Variable manufacturing
Company manufactures an intermediate product as W1. Variable manufacturing costs per unit of W1 are as follows: Direct materials $5 Direct labor $15 Variable manufacturing overhead $10. Company was offered to sell 10,000 units of W1 for $40 per unit. If accepts, $50,000 of fixed manufacturing OH will be eliminated. Applying differential analysis to the situation, comp should: a. Buy W1, the savings $100,000 b. Buy W1, thee savings $50,000 c. Make W1, the savings $100,000 d. Make W1, the savings $50,000
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