Homework Answers
SAVINGS = 19 PER UNIT
While calculating Internal Production cost for a decision making, only the variable costs are relevant as the absorbed overhead have to be incurred even if such product is manufactured or not.
here cost of manufacturing = $52 - $6 (absorbed overhead) = $46
Cost of purchase = $65
hence the savings per unit = 65 - 46 = $19 per unit
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