Manor, Inc. currently manufactures 1,000 subcomponents per month in one of its factories. The unit costs to produce the subcomponents are:     Per unit Direct materials   $ 19 Direct labor     54 Variable manufacturing overhead     41 Fixed manufacturing overhead     48 Total unit cost   $ 162   Manor is considering purchasing the subcomponents from an outside supplier, who normally charges $170 per unit. The supplier also has an "Exclusive Buyer's Club" which costs $17,000 per month to join, but whose members can purchase the subcomponents for $120 per unit. Fixed overhead is not avoidable. If Manor chose to purchase the subcomponents using the cheaper of the two buying options, what would be the effect on profit? (Do not round intermediate calculations.)   Multiple Choice   Increase $168,000   Increase $33,000   Decrease $23,000   Decrease $56,000

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Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.