Calculate per-unit advantage-disadvantage of further process

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Reference no: EM13956585

Mitrex Company makes a semi-finished machine component for the heavy equipment industry that has a unit contribution margin of $250 to Mitrex. A major customer has been purchasing 100 units per month from Mitrex for many years, but has indicated that it would prefer to purchase them already machined to its specifications. It has offered to pay an additional $50 per unit for the finished units. To meet those specifications, Mitrex would have to rent additional equipment at a cost of $2,000 per month and incur labor and other direct costs of $15 per unit. Calculate the per-unit advantage or disadvantage of further processing. a. $15 advantage b. $35 advantage c. $50 advantage d. $15 disadvantage

Reference no: EM13956585

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