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Canada Sailboats Company manufactures 10 luxury yachts per month. A compact media center is included in each yacht. Canada Sailboats manufactures the media center in-house but is considering the possibility of outsourcing this function. At present, the variable cost per unit is $270, and the fixed costs are $40,000 per month. Justin Blake, the CEO, wishes to increase operating income by $3,000. He has an offer from a foreign producer to provide the media centers at a contract cost of $325 per unit. The required saving in fixed cost in order to achieve his objective would be ________.
A) $3,550
B) $550
C) $3,000
D) $2,700
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Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
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7 years ago
Will mark this subject solved, thanks
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