Chapman Company manufactures widgets. Embree Company has approached Chapman with a proposal to sell the...
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Chapman Company manufactures widgets. Embree Company has approached Chapman with a proposal to sell the company widgets at a price of $125,000 for 100,000 units. Chapman is currently making these components in its own factory. The company has no alternative use for the facility. The following costs are associated with this part of the process when 100,000 units are produced: Direct materials $ 46,500 Direct labor 43,500 Fixed Overhead 60,000 Total $150,000 The correct decision would be to:
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