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The daily production of Product X is 5 7 6 piece. The cost accounting records show the following average daily production costs for Product X

The daily production of Product X is 576 piece. The cost accounting records show the following average daily production costs for Product X is RM288. The department head found that an outside company sells Product X at RM0.35 per piece. Accordingly, the foreman figured a cost per day of RM0.35(576)= RM201.60, resulting in a daily savings of RM288.40-RM201.60= RM86.80.Therefore, a proposal was submitted to the plant manager for shutting down the production line of Product X and buying it from the outside company. Are you agree?

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