Green Company produces 100 parts per year, which are used in the assembly of one...
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Accounting
Green Company produces 100 parts per year, which are used in the assembly of one of its products. The unit product cost of these parts is:
Variable manufacturing cost $12
Fixed manufacturing cost $9
Unit product cost $21
The part can be purchased from an outside supplier at $18 per unit. If the part is purchased from the outside supplier, $500 of the fixed manufacturing costs can be eliminated. What would happen to the cost of 100 units if the company decided to purchase the parts from the supplier?
A. $200 increase in cost
b. $300 decrease in cost
c. $200 increase in cost
d.$100 increase in cost
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