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Home Q & A Board Other Fields Homework Help Business Accounting
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HaydenH01 HaydenH01
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5 years ago
McMurphy Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 12,000 units of this part are as follows:

Direct materials$86,000
Direct labor126,000
Variable factory overhead58,000
Fixed factory overhead138,000
Total costs$408,000

Of the fixed factory overhead costs, $55,000 is avoidable.  Conners Company has offered to sell 12,000 units of the same part to McMurphy Corporation for $41 per unit.

 Assuming there is no other use for the facilities, Schmidt should ________.
A) make the part, as this would save $16 per unit
B) buy the part, as this would save $16 per unit
C) buy the part, as this would save the company $192,000
D) make the part, as this would save $14 per unit
Textbook 
Cost Accounting: A Managerial Emphasis

Cost Accounting: A Managerial Emphasis


Edition: 16th
Authors:
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rwbumarwbuma
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5 years ago
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HaydenH01 Author
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#2
5 years ago
Thank you for helping me with my quiz
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#3
5 years ago
Perfect
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