(Solved):Teche Corporation produces a part used in the manufacture of one of its products. The unit…

 

Question

Teche Corporation produces a part used in the manufacture of one of its products. The unit product cost is $26, computed in the table below by the company’s accountant.

Direct materials $10
Direct labor 7
Variable manufacturing overhead 1
Fixed manufacturing overhead 8
Total product cost per unit $26

An outside supplier has offered to provide the annual requirement of 5,000 of the parts for only $21 each. The company estimates

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