Business, 29.07.2020 16:01 natalie2sheffield
Han Products manufactures 25,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials $ 3.90 Direct labor 8.00 Variable manufacturing overhead 2.10 Fixed manufacturing overhead 6.00 Total cost per part $ 20.00 An outside supplier has offered to sell 25,000 units of part S-6 each year to Han Products for $18 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $75,000. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier. Required:
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Han Products manufactures 25,000 units of part S-6 each year for use on its production line. At this...