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Company manufactures part G for use in its production cycleThe cost per for each of 1 2 , 0 0 0 units of part G

Company manufactures part G for use in its production cycleThe cost per for each of 12,000 units of part G are as follows: Direct materials $5 Direct labor 12 Variable 6 overhead Fixed overhead 7 $ 30 Verona Company has offered to sell Plainfield 12,000 units of part G for $25 per unit Plainfield accepts Verona's offer, the released facilities could be used to save $ 41,000 in relevant costs in the manufacture of part H. In addition 4 per unit of the fixed overhead applied to part G would be eliminated . Which alternative is more desirable and by what amount ? Alternative Amount A ) Manufacture 10,000 B ) Manufacture 15,000 C ) Buy $ 35,000 Buy $ 65,000 E ) $ 10,000

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