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Schopp Inc. has been manufacturing its own shades for its table lamps. The company is...

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Accounting

Schopp Inc. has been manufacturing its own shades for its table lamps. The company is currently operating at 100% of capacity. Variable manufacturing overhead is charged to production at the rate of 70% of direct labor cost. The direct materials and direct labor cost per unit to make the lamp shades are $4.00 and $5.00, respectively. Normal production is 30,000 table lamps per year. A supplier offers to make the lamp shades at a price of $12.75 per unit. If Schopp Inc. accepts the supplier

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