Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $18 per unit. The unit cost for the business to make the part is $22 including fixed costs and $11 excluding fixed costs. If 34,033 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it? Oa. $612,594 cost decrease Ob. $238,231 cost increase Oc. $238,231 cost decrease Od. $136.132 cost increase

Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $18 per unit. The unit cost for the business to make the part is $22 including fixed costs and $11 excluding fixed costs. If 34,033 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it? Oa. $612,594 cost decrease Ob. $238,231 cost increase Oc. $238,231 cost decrease Od. $136.132 cost increase

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Description: Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $18 per unit. The unit cost forthe business to make the part is $22 including fixed costs and $11 excluding fixed costs. If 34,0

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...

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