Question

Ice Cold Corporation makes dorm-size refrigerators. The company’s records show the following unit costs to manufacture part #15498:
Direct materials ......... $15
Direct labor .......... $18
Variable overhead ....... $23
Fixed overhead ........ $13
Another manufacturer has offered to supply Ice Cold Corporation with part #15498 for a cost of $60 per unit. Ice Cold uses 1,000 units annually.

Required
If Ice Cold Corporation accepts the offer, what will be the short-run impact on income?\



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  • CreatedMarch 11, 2015
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