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Johnson Corporation manufactures Alpha for use in its production cycle. The cost per unit for 10,000 units of Alpha are as follows: Direct materials $3
Johnson Corporation manufactures Alpha for use in its production cycle. The cost per unit for 10,000 units of Alpha are as follows: Direct materials $3 Direct labor $15 Variable overhead $6 Fixed overhead $8 Robinson Corporation has offered to sell Johnson 10,000 units of Alpha for $30 per unit. If Johnson accepts Robinson's offer, the released facilities could be used to save an additional $45,000 in relevant costs in the manufacture of another part, Beta. In addition, $5 per unit of the fixed overhead relating to Alpha would be totally eliminated. If they accept Robinson's offer, profit will increase or decrease (by $ enter a negative number if it will decrease)
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