Ruby Co. currently manufactures a subassembly for its main product. The costs per unit are as follows: Direct Materials P 450 Direct Labor 350 Variable
Ruby Co. currently manufactures a subassembly for its main product. The costs per unit are as follows:
Direct Materials P 450
Direct Labor 350
Variable Overhead 330
Fixed Overhead 300
Total P 1,430
Gem Inc. has contacted Ruby with an offer to sell 5,000 of the subassemblies for P1,350 each. Ruby will eliminate P850,000 of fixed overhead if it accepts the proposal
How much is the total relevant cost to make?
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Authors: Don R. Hansen, Maryanne M. Mowen
2nd edition
1111824401, 978-1111824402
