Paxton Company can produce a component of its product that incurs the following costs per...
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Accounting
Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials, $10.30; direct labor, $14.30, variable overhead $3.30 and fixed overhead, $8.30. An outside supplier has offered to sell the product to Paxton for $36.20. Compute the net incremental cost or savings of buying the component.
Answers:
(A) $3.30 savings per unit.
(B) $3.30 cost per unit.
(C) $0 cost or savings per unit.
(D) $8.30 savings per unit.
(E) $8.30 cost per unit.
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