Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials,$10;direct labor,$14,variable overhead,$3 and fixed overhead,$8.An outside supplier has offered to sell the product to Axle for $32.Compute the net incremental cost or savings of buying the component.
A)$5.00 savings per unit.
B)$3.00 cost per unit.
C)$0 cost or savings per unit.
D)$5.00 cost per unit.
E)$3.00 savings per unit.

Question

Quizplus · Accepted Answer

The Answer of Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials,$10;direct labor,$14,variable overhead,$3 and fixed overhead,$8.An outside supplier has offered to sell the product to Axle for $32.Compute the net incremental cost or savings of buying the component.
A)$5.00 savings per unit.
B)$3.00 cost per unit.
C)$0 cost or savings per unit.
D)$5.00 cost per unit.
E)$3.00 savings per unit.

Paxton Company Can Produce a Component of Its Product That