Plainfield Company manufactures part G for use in its production cycle. The full cost per unit for each of 12,000 units of part G are as follows: Direct materials $4 Direct labor 12 Variable overhead 6 Fixed overhead 7 $29 Verona Company has offered to sell Plainfield 12,000 units of part G for $31 per unit. If Plainfield accepts Verona's offer, the released facilities could be used to save $45,000 in relevant costs in the manufacture of part H. In addition, $4 per unit of the fixed overhead applied to part G would be eliminated. Which alternative is more desirable and by what amount

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan

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