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BarGraphs Corp. had capacity to produce4,000 units of L3 using40,000 kg of direct materials. BarGraphs...

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Accounting

BarGraphs Corp. had capacity to produce4,000 units of L3 using40,000 kg of direct materials. BarGraphs produced3,850 units of L3 by processing35,500 kg of direct materials. Conversion cost per unit is$7.00. BarGraphs can add or reduce manufacturing capacity in increments of4,500 kgs.

What would be the cost savings if BarGraphs decides to reduce manufacturing capacity by4,500 kgs?

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