Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 4 15 pts XYZ Company manufactures plugs at a cost of $38 per unit, which includes $15 of overhead, and 40% of the overhead
Question 4 15 pts XYZ Company manufactures plugs at a cost of $38 per unit, which includes $15 of overhead, and 40% of the overhead is variable. XYZ needs 40,000 of these plugs annually (as part of a larger product it produces). ABC Company has offered to sell these units to Regis at $32 per unit. If XYZ decides to purchase the plugs, $100,000 of the annual fixed overhead cost will be eliminated, and the company may be able to rent the facility previously used for manufacturing the plugs. If the plugs are purchased and the facility rented, XYZ Company wishes to realize $100,000 in net savings annually. Note: round all decimals to two places. What is the relevant cost make? To achieve a net savings of $100,000 annually, the minimum annual rent on the facility must be
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started