Cozy Nights Industries manufactures down-filled comforters and uses activity-based costing.The following information is provided for September.
Each comforter consists of 4 parts and the direct materials cost per comforter is $14.00. If the cost of purchasing nearly the same comforter from a supplier is $88.80, what should Cozy Night do to maximize profits?
A) Continue to manufacture the comforters.
B) Redesign the packaging.
C) Since the cost to manufacture the comforter is also $88.80, the company would make the same profit whether it bought the comforter or
D) Close down the business.
E) Purchase the comforter from the supplier.
Correct Answer:
Verified
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