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Shows, Inc. is considering eliminating a department that reports a contribution margin of $115000 and fixed costs of $240000. Only $220000 of the fixed costs
Shows, Inc. is considering eliminating a department that reports a contribution margin of $115000 and fixed costs of $240000. Only $220000 of the fixed costs are avoidable. The annual financial advantage (disadvantage) for Shows of eliminating this department is: Multiple Choice $105000 $(105000) $95000 0 $125000 Direct Materials Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead Total Cost $ 60,000 85,000 50.000 70,000 $ 265,000 Glass has an opportunity to buy the 10,000 parts from another company for $27 each. If Glass buys the parts it can rent out the space currently used to make Part 723 for $60,000 per year. All variable costs and 40% of the fixed costs are avoidable if the parts are purchased. Based on this information, would Glass be financially better off making or buying the parts and by how much? Multiple Choice $ 13,000 better to buy $ 55,000 better to buy $ 47,000 better to make $5,000 better to make Drew 2 Mout
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