Baloney company has offered to sell janice foeld 10000

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Reference no: EM13588537

Janice Foeld Company manufactures part Z for use in its production cycle.The costs per unit for 10,000 units of part Z are as follows.

Direct materials	$3
Direct labor	15
Variable overhead	6
Fixed overhead	8
TOTAL	$32

Baloney Company has offered to sell Janice Foeld 10,000 units of part Z for $30 per unit. If Janice Foeld accepts Baloney's offer, the released facilities can be used to save $45,000 in relevant costs in the manufacture of part A. In addition, $5 per unit of the fixed overhead applied to part Z would be totally eliminated.

Reference no: EM13588537

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