Rubium Micro Devices currently manufactures a subassembly for its main product.The costs per unit are as follows:

Crayola Technologies Inc.has contacted Rubium with an offer to sell 10,000 of the subassemblies for $138.00 each.Rubium will eliminate $89,000 of fixed overhead if it accepts the proposal.What are the relevant costs for Rubium?
A)$929,000
B)$1,029,000
C)$1,409,000
D)$1,739,000

Question

Rubium Micro Devices currently manufactures a subassembly for its main product.The costs per unit are as follows:

Crayola Technologies Inc.has contacted Rubium with an offer to sell 10,000 of the subassemblies for $138.00 each.Rubium will eliminate $89,000 of fixed overhead if it accepts the proposal.What are the relevant costs for Rubium?
A)$929,000 
B)$1,029,000 
C)$1,409,000 
D)$1,739,000

Quizplus · Accepted Answer

The relevant costs for Rubium = [($51.00 + $43.00 + $38.00)× 10,000 + $89,000] = $1,409,000

Rubium Micro Devices Currently Manufactures a Subassembly for Its Main