Question: Olive Corp. currently makes 13,100 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing
Olive Corp. currently makes 13,100 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 $ 24 24 14 9 $71 An outside supplier has offered to provide Olive Corp, with the 13,100 subcomponents at an $93 per unit price. Fixed overhead is not avoidable. If Olive Corp. accepts the outside offer, what will be the effect on short-term profits? Multiple Choice $117.900 decrease $620,000 increase $117.900 increase
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