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Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials, $9.20; direct labor, $13.20, variable overhead $2.20
Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials, $9.20; direct labor, $13.20, variable overhead $2.20 and fixed overhead, $7.20. An outside supplier has offered to sell the product to Paxton for $31.80. Compute the net incremental cost or savings of buying the component. Multiple Choice $0 cost or savings per unit. $2.20 cost per unit. $2.20 savings per unit. $7.20 cost per unit. $7.20 savings per unit
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