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Edmond Corporation Has Been Manufacturing 5,000 Units of Part 10541,which

Question 64

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Edmond Corporation has been manufacturing 5,000 units of Part 10541,which is used in the manufacture of one of its products.At this level of production,the cost per unit of manufacturing Part 10541 is as follows: Edmond Corporation has been manufacturing 5,000 units of Part 10541,which is used in the manufacture of one of its products.At this level of production,the cost per unit of manufacturing Part 10541 is as follows:   Arcadia Company has offered to sell Edmond 5,000 units of Part 10541 for $19 a unit.Edmond has determined that it could use the facilities currently used to manufacture Part 10541 to manufacture Part RAC and generate an operating profit of $4,000.Edmond has also determined that two-thirds of the fixed overhead applied will continue even if Part 10541 is purchased from Arcadia.To determine whether to accept Arcadia's offer,the net relevant costs to make are A) $70,000. B) $84,000. C) $90,000. D) $95,000. Arcadia Company has offered to sell Edmond 5,000 units of Part 10541 for $19 a unit.Edmond has determined that it could use the facilities currently used to manufacture Part 10541 to manufacture Part RAC and generate an operating profit of $4,000.Edmond has also determined that two-thirds of the fixed overhead applied will continue even if Part 10541 is purchased from Arcadia.To determine whether to accept Arcadia's offer,the net relevant costs to make are


A) $70,000.
B) $84,000.
C) $90,000.
D) $95,000.

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