Question: Mitken Corp currently makes 20,000 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing
Mitken Corp currently makes 20,000 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost Per unit $15 10 15 10 $55 An outside supplier has offered to provide Mitken Corp with the 20,000 subcomponents at a $45 per unit price. If Mitken Corp accepts the outside offer, what will be the effect on short-term profits? O $200,000 decrease O $400,000 increase $200,000 increase $100,000 decrease
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