Question
During 20x6, America, Inc., produced, among other products, 8,700 cameras, incurring the following unit costs: $5 in direct materials, $3 in direct labor, $2 in
During 20x6, America, Inc., produced, among other products, 8,700 cameras, incurring the following unit costs: $5 in direct materials, $3 in direct labor, $2 in variable overhead, $4 in fixed overhead, $0.50 in variable selling and administrative expenses, and $1 in fixed selling and administrative expenses. An outsider had offered to produce the cameras for $12 each. Assuming that the factory space would have been idle otherwise, acceptance of the outside offer would have
a) lost the company $13,050
b) saved the company $18,050
c) lost the company $8,700
d. saved the company $33,050
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