The Rug Weaving Company manufactures an intermediate product…
The Rug Weaving Company manufactures an intermediate product identified as Y3. Variable manufacturing costs per unit of Y3 are as follows: Direct materials $2 Direct labor $7 Variable manufacturing overhead $5 Purple Company has offered to sell Rug Weaving 5,000 units of Y3 for $20 per unit. If Rug Weaving accepts the offer, $25,000 of fixed manufacturing overhead will be eliminated.Applying differential analysis to the situation, Rug Weaving should Select one: