If the company decides to buy part B13, 50% of the administrative costs would be avoided. All of the Robin Company items, including part B13, are manufactured in the same rented production facility. The company has an offer from a wholesaler that wishes to sell the part to Robin for $31 per unit. What effect will occur if the company decides to accept the offer?
Answer
A.The cost for this part will decrease by $14 per unit.
B.The cost for this part will increase by $5 per unit.
C.The cost for this part will be the same.
D.The cost for this part will decrease by $10 per unit.