Questions by wmoore - Page 27
Verona Company has offered to sell Plainfield 10,000 units of part G for $30 per unit. If Plainfield accepts Verona's offer, the released facilities could be used to save $45,000 in relevant costs in the manufacture of part H. In addition, $5 per unit of the fixed overhead applied to part G would be eliminated. Based solely on a short-term financial analysis, which alternative is more desirable and by what amount?OptionAlternativeAmountA)Manufacture$10,000B)Manufacture$15,000C)Buy$35,000D)Buy$65,000E)Buy$10,000