Solution-What is the financial advantage of accepting the

What is the financial advantage of accepting the offer

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Question - Macy's makes 10,000 units per year of X, and has direct material cost of $10 per unit, direct labor cost of $5 per unit, variable overhead costs of $3 per unit, and variable selling costs of $6 per unit. In addition, Macy's has depreciation expense of $30,000 per year on a machine with no resale value, and fixed manufacturing overhead of $40,000 per year has been allocated to product X by Macy's. JCPenny has offered to sell them 10,000 units of a good substitute for X for $280,000. What is the financial advantage/disadvantage of accepting the offer?

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What is the financial advantage of accepting the offer

Reference no: EM132953460

Reference no: EM132953460

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