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QUESTION
The total amount of general factory overhead, which is allocated on the basis of direct labor hours, would be unaffected by this decision.
The total amount of general factory overhead, which is allocated on the basis of direct labor hours, would be unaffected by this decision. The $30 unit product cost is based on 20,000 parts produced each year. An outside supplier has offered to provide the 20,000 parts at a cost of $25 per part. Should we accept the suppliers offer?
