Plainfield Company manufactures part G for use in its production cycle. The costs per unit for 10,000 units of part G are as follows: Verona Company has offered to sell Plainfield 10,000 units of part G for $30 per unit. If Plainfield accepts Verona's offer, the released facilities could be used to save $45,000 in relevant costs in the manufacture of part H. In addition, $5 per unit of the fixed overhead applied to part G would be totally eliminated. What alternative is more desirable and by what amount?
A)Option A
B)Option B
C)Option C
D)Option D

Question

Plainfield Company manufactures part G for use in its production cycle. The costs per unit for 10,000 units of part G are as follows:  Verona Company has offered to sell Plainfield 10,000 units of part G for $30 per unit. If Plainfield accepts Verona's offer, the released facilities could be used to save $45,000 in relevant costs in the manufacture of part H. In addition, $5 per unit of the fixed overhead applied to part G would be totally eliminated. What alternative is more desirable and by what amount? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

The Answer of Plainfield Company manufactures part G for use in its production cycle. The costs per unit for 10,000 units of part G are as follows:  Verona Company has offered to sell Plainfield 10,000 units of part G for $30 per unit. If Plainfield accepts Verona's offer, the released facilities could be used to save $45,000 in relevant costs in the manufacture of part H. In addition, $5 per unit of the fixed overhead applied to part G would be totally eliminated. What alternative is more desirable and by what amount? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Plainfield Company Manufactures Part G for Use in Its Production