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Business, 05.05.2020 07:10 noslengerman

Regis Company manufactures plugs used in its manufacturing cycle at a cost of $36 per unit, which includes $8 of fixed overhead. Regis needs 30,000 of these plugs annually, and Orlan Company has offered to sell these units to Regis at $33 per unit. If Regis decides to purchase the plugs, $60,000 of the annual fixed overhead cost will be eliminated, and the company may be able to rent the facility previously used for manufacturing the plugs. Required: Hint… label your work so that I can assign partial credit, and mark your answers clearly… A) If Regis Company purchases the plugs but does not rent the unused facility, how much would the company save (or lose) per unit? B) If the plugs are purchased and the facility IS rented, Regis Company wishes to realize $100,000 in net savings annually. To achieve this goal, how much should Regis charge in minimum annual rent?

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Regis Company manufactures plugs used in its manufacturing cycle at a cost of $36 per unit, which in...
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