Solution-What is the maximum price cotton corp should pay

What is the maximum price cotton corp should pay the outside

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Reference no: EM132715572

Cotton Corp currently makes 10,000 subcomponents a year in one of its factories. The unit costs to produce are:

Direct Materials 32.50

Direct Labor 13.00

Variable manufacturing overhead 19.50

Fixed manufacturing overhead 26.00

Problem 1: An outside supplier has offered to provide Cotton Corp with the 10,000 subcomponents at a P84.50 per unit price. Fixed overhead is not avoidable. What is the maximum price Cotton Corp should pay the outside supplier?

Reference no: EM132715572

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What is the maximum price cotton corp should pay the outside

Reference no: EM132715572

Reference no: EM132715572

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