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Cotton Corp. currently makes 12,600 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing
Cotton Corp. currently makes 12,600 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost Per unit $24.00 26.00 20.00 10.00 $80.00 An outside supplier has offered to provide Cotton Corp. with the 12,600 subcomponents at an $92.00 per unit price. Fixed overhead is not avoidable. What is the maximum price Cotton Corp. should pay the outside supplier? Multiple Choice $70.00 O $80.00 O $92.00 O $34.00
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