(Solved):Plainfield Company manufactures Part G for use in its production cycle. The costs per unit for…

 

Question

Plainfield Company manufactures Part G for use in its production cycle. The costs per unit for 10,000 units of Part G are as follows:

  • Direct materials: $3
  • Direct labor: $15
  • Variable overhead: $6
  • Fixed overhead: $8

Verona Company has offered to sell Plainfield 10,000 units of Part G for $30 per unit. If Plainfield accepts Verona’s offer, the released facilities could be used to save $45,000 in relevant costs in the manufacture of Part H.

Scroll to top