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Linda_us
Linda_us, Finance, Accounts & Homework Tutor
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Hanson, Inc. makes 1,000 units per year of a part called a

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Hanson, Inc. makes 1,000 units per year of a part called a "prositron" for use in one of its products. Data concerning the unit production costs of the prositron follow:

Direct Materials $342

Direct Labor 80

Variable Manufacturing OH 48

Fixed Manufacturing OH 520

Total $990

An outside supplier has offered to sell Hanson, Inc. all of the prositrons it requires. If Hanson, Inc. decided to discontinue making the prositrons, 10% of the above fixed manufacturing overhead costs could be avoided.

Required: Assume Hanson, Inc. has no alternative use for the facilities presently devoted to production of the prositrons. If the outside supplier offers to sell the prositrons for $850 each, should Hanson, Inc. accept the offer? Fully support your answer with appropriate calculations.
Hi Customer

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Linda
Customer: replied 6 years ago.
the 52 is what I'm not understanding. I thought the 10% is what be removed, not what is remaining. I'm sorry if I'm being difficult, I just want to make certain its correct and i will gladly leave positive feedback and accept
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Customer: replied 6 years ago.
Thank you for the explanation. I have 2 more questions that I would prefer you answer since you clearly have a grasp for this subject. I will place "for linda" in front of the next 2 questions unless there is an easier way.
Thats the best way. I am waiting for your questions.