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Plainfield Company manufactures part G for use in its production cycle. The full cost per unit for each of 10,000 units of part G manufactured

Plainfield Company manufactures part G for use in its production cycle. The full cost per unit for each of 10,000 units of part G manufactured per year by Plainfield are as follows:

Direct materials $ 2
Direct labor 22
Variable overhead 5
Fixed overhead 14
$ 43

Verona Company has offered to sell Plainfield 10,000 units of part G for $40 per unit. If Plainfield accepts Verona's offer, the released facilities could be used to save $54,000 in relevant costs in the manufacture of part H. In addition, $11 per unit of the fixed overhead applied to part G would be eliminated. Based solely on a short-term financial analysis, which alternative is more desirable and by what amount?

Alternative Amount
A) Manufacture $ 10,000
B) Manufacture $ 34,000
C) Buy $ 54,000
D) Buy $ 84,000
E) Buy $ 10,000

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