Solution-What will be the effect on short term profits

What will be the effect on short term profits

Reference no: EM132715570

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

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. If Cotton Corp accepts the outside offer, what will be the effect on short term profits?

Reference no: EM132715570

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What will be the effect on short term profits

Reference no: EM132715570

Reference no: EM132715570

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