Refrigerator Company manufactures ice makers for installation in refrigerators. The costs per unit, for 20,000 units of ice makers, are as follows.
Cool Compartments Inc. has offered to sell 20,000 ice makers to Refrigerator Company for $28 per unit. If Refrigerator accepts Cool's offer, the plant would be idled and fixed overhead amounting to $6 per unit could be eliminated. The total relevant costs associated with the manufacture of ice makers amount to
A) $480,000.
B) $560,000.
C) $600,000.
D) $680,000.

Question

Refrigerator Company manufactures ice makers for installation in refrigerators. The costs per unit, for 20,000 units of ice makers, are as follows.
 Cool Compartments Inc. has offered to sell 20,000 ice makers to Refrigerator Company for $28 per unit. If Refrigerator accepts Cool's offer, the plant would be idled and fixed overhead amounting to $6 per unit could be eliminated. The total relevant costs associated with the manufacture of ice makers amount to
A) $480,000. 
B) $560,000. 
C) $600,000. 
D) $680,000.

Quizplus · Accepted Answer

The Answer of  Refrigerator Company manufactures ice makers for installation in refrigerators. The costs per unit, for 20,000 units of ice makers, are as follows.
 Cool Compartments Inc. has offered to sell 20,000 ice makers to Refrigerator Company for $28 per unit. If Refrigerator accepts Cool's offer, the plant would be idled and fixed overhead amounting to $6 per unit could be eliminated. The total relevant costs associated with the manufacture of ice makers amount to
A) $480,000. 
B) $560,000. 
C) $600,000. 
D) $680,000.

Refrigerator Company Manufactures Ice Makers for Installation in Refrigerators