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Business, 03.07.2021 01:00 dbautis25

Han Products manufactures 24,000 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 $ 3.80 Direct labor 12.00 Variable manufacturing overhead 2.20 Fixed manufacturing overhead 12.00 Total cost per part $ 30.00 An outside supplier has offered to sell 24,000 units of part S-6 each year to Han Products for $24 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 $74,000. 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.

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Han Products manufactures 24,000 units of part S-6 each year for use on its production line. At this...

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