Question: Coronado Industries produces 5000 units of part A12E. The following costs were incurred for that level of production: Direct materials $ 50000 Direct labor 155000

Coronado Industries produces 5000 units of part A12E. The following costs were incurred for that level of production:

Direct materials $ 50000
Direct labor 155000
Variable overhead 70000
Fixed overhead 175000

If Coronado buys the part from an outside supplier, $40000 of the fixed overhead is avoidable. What is the relevant cost per unit of part A12E?

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