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Cotton Corp.currently makes 13,700 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing overhead
Cotton Corp.currently makes 13,700 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost Per unit $23.00 24.00 14.00 9.00 $70.00 An outside supplier has offered to provide Cotton Corp, with the 13.700 subcomponents at an $70.00 per unit price. Fixed overhead is not avoidable. If Cotton Corp. accepts the outside offer, what will be the effect on short-term profits? Multiple Choice $123,300 Increase no change $83,570. Increase $123 300 decrease
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