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Nuru Co.

Nuru Co.

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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Nuru Co. manufactures special car sensors, among other car parts. The per unit cost to manufacture 20,000 car sensors is as follows: Direct materials Direct labour Variable overhead Fixed overhead - traceable Allocated fixed overhead Total $50 $40 $6 $10 $20 $126 Nuru is approached by Gisa Co. which offers to make Sensors for $115 per unit. The allocated fixed overhead consists of common costs which are allocated to segments on the basis of sales dollars. Required Part A 1. What is the financial advantage/disadvantage of accepting Gisa's offer?
Transcribed Image Text:Nuru Co. manufactures special car sensors, among other car parts. The per unit cost to manufacture 20,000 car sensors is as follows: Direct materials Direct labour Variable overhead Fixed overhead - traceable Allocated fixed overhead Total $50 $40 $6 $10 $20 $126 Nuru is approached by Gisa Co. which offers to make Sensors for $115 per unit. The allocated fixed overhead consists of common costs which are allocated to segments on the basis of sales dollars. Required Part A 1. What is the financial advantage/disadvantage of accepting Gisa's offer?
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