Grouper Corporation currently manufactures a subassembly for its main product. The costs per unit are as follows:
|
Direct materials
|
|
$
|
3.70
|
|
Direct labour
|
|
|
27.80
|
|
Variable overhead
|
|
|
15.40
|
|
Fixed overhead
|
|
|
26.60
|
|
Total
|
|
$
|
73.50
|
Regina Corp. has contacted Grouper with an offer to sell it 5,100 subassemblies for $53.20 each.