Assignment # 2 Star Ltd. collected the following information: Cost to buy one unit $48.00 Production costs per unit: Direct materials $22.00 Direct labour $16.00 Variable overhead $2.00 Total fixed overhead $360,000.00 Star Ltd. can sell 25,000 units (70% capacity) per year, at $80.00 each. Required: how much will be the cost to buy instead of making (ignore the special order)? the company also has an offer to rent its plant facilities for $250,000. the fixed overhead will be incurred in each alternative. e. how much star ltd. will earn extra profit if buy (ignore the special order)?




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