(Solved):Flop Company manufactures 10,000 units of widgets for its annual production. Costs are direct…

 

Question

Flop Company manufactures 10,000 units of widgets for its annual production. Costs are direct materials $20,000, direct labor $55,000, variable overhead $45,000, and fixed overhead $70,000. Floozy Company has offered to sell Flop 10,000 units of widgets for $18 per unit. If Flop accepts the offer, some of the facilities presently used to manufacture widgets could be rented to a third party at an annual rental of $15,000. Additionally, $4

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