PA6. LO 10.3 Gent Designs requires three units of part A for every unit of...
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PA6. LO 10.3 Gent Designs requires three units of part A for every unit of A1 that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4,000 units were produced: Direct materials Direct labor Manufacturing overhead Total $4.00 1.50 1.30 $6.80 Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next year's production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. If Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation
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