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Every year Concord Industries manufactures 10,000 units of part 231 for use in its production cycle. The per unit costs of part 231 are
Every year Concord Industries manufactures 10,000 units of part 231 for use in its production cycle. The per unit costs of part 231 are as follows: Direct materials $4.00 Direct labor 9.00 Variable manufacturing overhead 7.00 Fixed manufacturing overhead 10.00 Total $30.00 Sunland, Inc., has offered to sell 10,000 units of part 231 to Concord for $32 per unit. If Concord accepts Sunland's offer, its freed-up facilities could be used to earn $11,700 in contribution margin by manufacturing part 240. In addition, Concord would eliminate 40% of the fixed overhead applied to part
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