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Novak Corporation currently manufactures a subassembly for its main product. The costs per unit are as follows: Direct materials $ 3.50 Direct labour 28.00 Variable
Novak Corporation currently manufactures a subassembly for its main product. The costs per unit are as follows: Direct materials $ 3.50 Direct labour 28.00 Variable overhead 14.10 Fixed overhead 24.30 Total $ 69.90 Regina Corp. has contacted Novak with an offer to sell it 5,100 subassemblies for $51.90 each. (a) Should Novak make or buy the subassemblies? Create a schedule that shows the total quantitative differences between the two alternatives. (Round all entries to 2 decimal places, eg. 1.25.) Cost to make $ per unit Cost to buy $ per unit Novak should the subassemblies. e Textbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (b) The accountant decides to investigate the fixed costs to see whether any incremental changes will occur if the subassembly is no longer manufactured. The accountant believes that Novak will eliminate $51,000 of fixed overhead if it accepts the proposal. Does this new information change the decision? (Round all entries to 2 decimal places, eg. 1.25.) Cost to make $ per unit Cost to buy $ per unit Novak should the subassemblies. e Textbook and Media Save for Later Attempts: 0 of 3 used Submit
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