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Cotton Corp. currently makes 9,100 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing
Cotton Corp. currently makes 9,100 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead Total unit cost Per unit $32.00 25.00 18.00 9.00 $84.00 An outside supplier has offered to provide Cotton Corp. with the 9,100 subcomponents at an $90.00 per unit price. Fixed overhead is not avoidable. Cotton Corp. accepts the outside offer, what will be the effect on short-term profits? Multiple Choice $136.500 decrease $81,900 Increase $68,250 Increase
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