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  1. business
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  3. you own air-pro company, which makes 8,000units of

You own Air-Pro Company, which makes 8,000units of Atmos-trons per year. The per-unit manufacturing costs...

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Accounting

You own Air-Pro Company, which makes 8,000units of Atmos-trons per year. The per-unit manufacturing costs o Atmos-Trons are as follows:

Direct Materials $16.00

Direct Labor (variable cost) $20.00

Manufacturing Overhead: $18.00

An outside company has offered to sell you the same Atmos-Trons units. They would supply all 8000 units annually and would charge you $52.50 per unit.

If you accept the offer (and stop making the Atmos-Trons) all the per unit manufacturing costs would be avoided EXCEPT for $7 per unit of the manufacturing overhead which will remain (it is related to the supervisors fixed salary; that supervisor will be reassigned into some admin department with Air-Pro)

Based on managerial accounting, should you accept the offer and discontinue making the Atmos-Trons and instead buy from outside? (YES or NO) AND

What would be the (single dollar amount) effect on the annual net income if you accept the offer? (show full calculations)

Price Per unit

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