Canrad Company manufactures Tool A used in its manufacturing cycle at a cost of P36 per unit that includes P8 of fixed overhead. Mulan needs 30,000 of these tools annually, and Starlight Inc., has offered to sell these units to Mulan at P33 per unit. If Mulan decides to purchase the Tools. P60,000 of the annual fixed overhead applied will be eliminated, and the company may be able to rent the facility previously for manufacturing the tools. If Canrad Company purchases the tools but does not rent the unused facility, how much will be the per unit savings/loss? How much will be the per unit savings/loss? If the tools are purchased and the facility rented, Canrad Co., wished to realize P100,000 in savings annually. To achieve this goal, how much is the minimum annual rent on the facility
Canrad Company manufactures Tool A used in its manufacturing cycle at a cost of P36 per unit that includes P8 of fixed overhead. Mulan needs 30,000 of these tools annually, and Starlight Inc., has offered to sell these units to Mulan at P33 per unit. If Mulan decides to purchase the Tools. P60,000 of the annual fixed overhead applied will be eliminated, and the company may be able to rent the facility previously for manufacturing the tools. If Canrad Company purchases the tools but does not rent the unused facility, how much will be the per unit savings/loss? How much will be the per unit savings/loss? If the tools are purchased and the facility rented, Canrad Co., wished to realize P100,000 in savings annually. To achieve this goal, how much is the minimum annual rent on the facility
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Canrad Company manufactures Tool A used in its manufacturing cycle at a cost of P36 per unit that includes P8 of fixed
- How much will be the per unit savings/loss?
- If the tools are purchased and the facility rented, Canrad Co., wished to realize P100,000 in savings annually. To achieve this goal, how much is the minimum annual rent on the facility?
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