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What the amount of differential cost increase or decrease

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Reference no: EM132805854

Problem 1: Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $14.00 per unit. The unit cost for the business to make the part is $20.00, including fixed costs, and $9.00, not including fixed costs. If 31,242 units of the part are normally purchased during the year but could be manufactured using unused capacity, the amount of differential cost increase or decrease from making the part rather than purchasing it would be a

a. $187,452 cost increase
b. $156,210 cost decrease
c. $437,388 cost decrease
d. $156,210 cost increase

Reference no: EM132805854

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