Zalinski Company manufactures a part for its production cycle. The costs per unit for 10,000...
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Accounting
Zalinski Company manufactures a part for its production cycle. The costs per unit for 10,000 units of the part are as follows:
Per Unit
Direct materials $25.00
Direct labor 20.00
Variable factory overhead 10.00
Fixed factory overhead 15.00
Total costs $70.00
The fixed factory overhead costs are unavoidable. Tokic Company has offered to sell 10,000 units of the same part to Zalinski Company for $60 per unit. Assuming no other use for the facilities, Zalinski Company should ________.
A) make the part to save $25,000
B) make the part to save $50,000
C) buy the part from Tokic Company to save $40,000
D) buy the part from Tokic Company to save $60,000
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