Prepare an analysis showing the total cost saving

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Reference no: EM131152641

Manson Industries incurs unit costs of $7 ($5 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 16,100 of the assembly part at $6 per unit.

If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manson will realize by buying the part.

Reference no: EM131152641

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