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ZOOM IN TO VIEW. JUST NEED THEE ASNWER Golden, Inc. has been manufacturing 5,000 units of Part 10541, which is used in one of its
ZOOM IN TO VIEW. JUST NEED THEE ASNWER
Golden, Inc. has been manufacturing 5,000 units of Part 10541, which is used in one of its products. At this level of production, the unit product cost of Part 10541 is as follows: $2 Direct Materials Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Overhead Unit Product Cost $4 $20 Brown Company has offered to sell Golden 5,000 units of Part 10541 for $19 a unit. Golden has determined that one-third of the fixed manufacturing overhead will continue even if Part 10541 is purchased from Brown. Assume that direct labour is an avoidable cost in this decision. What would be the impact on Nl of the decision to buy from Brown Compnay rather than manufacturing the parts internally? Multiple Choice $5,000 decrease in NI $25,000 decrease in NI $25,000 increase in NI $5,000 increase in NIStep by Step Solution
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