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Unformatted text preview: a. Total costs b. Total variable costs c. Variable manufacturing costs d. Total manufacturing costs 3. Bunny Company produces a part that is used in the manufacture of one of its products. The costs associated with the production of 11,000 units of this part are as follows: Direct materials $25,000 Direct labor 34,000 Variable factory overhead 65,000 Fixed factory overhead 50,000 $174,000 Of the fixed factory overhead costs, $9,000 is avoidable. Required: a. Assuming there is no alternative use for the facilities, should Bunny Company take advantage of an offer from a supplier who is willing to sell Bunny Company 11,000 units of the same part for $12.50 per unit? b. Would your answer to Part A change if the facilities could be rented for $10,000 a year?...
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- Spring '10