Question: PPP Inc. (the company) manufactures golf clubs. One of their divisions manufactures a grip which are used in several of their golf clubs. They produce 14,000 grips annually. The cost per unit for the grip is as follows: Per Unit Description Cost Direct materials $5.90 Direct labour $3.10 Variable overhead $2.20 Fixed overhead $11.40 Total cost $22.60 Of the total fixed overhead assigned to the grips, $112,000 is directly traceable to the production of the grips. The remaining fixed overhead costs are common fixed overhead and therefore unavoidable. An outside supplier has offered to sell the grips to the company for $24.00 per unit. Main Content