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$84.50 per-ur An outside supplier has offered to provide Cotton with the 10,000 overhead is avoidable. If Cotton accepts the outside offer, what will be the effect on short-term profits? Multiple Choice O $195,000 decrease No change O $260,000 increase

$84.50 per-ur An outside supplier has offered to provide Cotton with the 10,000 overhead is avoidable. If Cotton accepts the outside offer, what will be the effect on short-term profits? Multiple Choice O $195,000 decrease No change O $260,000 increase

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An outside supplier has offered to provide Cotton with the 10,000 subcomponents at an $84.50 per-unit price. No portion of fixed overhead is avoidable. If Cotton accepts the outside offer, what will be the effect on short-term profits? Multiple Choice $195,000 decrease No change $260,000 increase $65,000 increase
Transcribed Image Text:An outside supplier has offered to provide Cotton with the 10,000 subcomponents at an $84.50 per-unit price. No portion of fixed overhead is avoidable. If Cotton accepts the outside offer, what will be the effect on short-term profits? Multiple Choice $195,000 decrease No change $260,000 increase $65,000 increase
Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost Cost per Unit $ 32.50 13.00 19.50 26.00 $91.00 An outside supplier has offered to provide Cotton with the 10,000 subcomponents at an $84.50 per-unit price. No portion of fixed overhead is avoidable. If Cotton accepts the outside offer, what will be the effect on short-term profits?
Transcribed Image Text:Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost Cost per Unit $ 32.50 13.00 19.50 26.00 $91.00 An outside supplier has offered to provide Cotton with the 10,000 subcomponents at an $84.50 per-unit price. No portion of fixed overhead is avoidable. If Cotton accepts the outside offer, what will be the effect on short-term profits?
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