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Shelley Company manufactures Part No: 498 for use in its production line. Manufacturing cost per unit for 20,000 units of Part No. 498 in as

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Shelley Company manufactures Part No: 498 for use in its production line. Manufacturing cost per unit for 20,000 units of Part No. 498 in as follows: $6 30 Direct materials Direct labor Variable overhead Fixed overhead allocated Total manufacturing cost per unit 12 16 564 The Tray Company has offered to sell 20,000 units of Part No: 498 to Shelley Company for $60 per unit. Shelley Company will make the decision to buy the part from Tray if there 18 an overall savings of at least $65,000 for Shelley Company. It Shelley Company accepta Trays offer, $9 per unit of the fixed overhead allocated would be eliminated. Furthermore, Shelley Company has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 595. For Shelley Company to achieve an overall savings of $25,000, the amount of relevant costs that would have to be saved by using the released facilities in the manufacture of part No. 575 would be? 5 125,000 85,000 265,000 OS 25,000 Cannot be determined Shelley Company manufactures Part No: 498 for use in its production line. Manufacturing cost per unit for 20,000 units of Part No. 498 in as follows: $6 30 Direct materials Direct labor Variable overhead Fixed overhead allocated Total manufacturing cost per unit 12 16 564 The Tray Company has offered to sell 20,000 units of Part No: 498 to Shelley Company for $60 per unit. Shelley Company will make the decision to buy the part from Tray if there 18 an overall savings of at least $65,000 for Shelley Company. It Shelley Company accepta Trays offer, $9 per unit of the fixed overhead allocated would be eliminated. Furthermore, Shelley Company has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 595. For Shelley Company to achieve an overall savings of $25,000, the amount of relevant costs that would have to be saved by using the released facilities in the manufacture of part No. 575 would be? 5 125,000 85,000 265,000 OS 25,000 Cannot be determined

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