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2) Suppose Geely Company executive in China is trying to decide whether the company should continue to manufacture tyre or purchase it from Bridgestone for

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2) Suppose Geely Company executive in China is trying to decide whether the company should continue to manufacture tyre or purchase it from Bridgestone for OMR 30 each. In the coming year Geely Company is expected 8,000 numbers of tyres needed. Data for the 8,000 units of tyres if Geely Company make tyres is as follows: Direct material OMR 90,000 Direct labor OMR 45.000 Factory overhead, variable OMR 30,000 Factory overhead, fixed OMR 95,000 Total cost OMR 2,60,000 Therefore the cost per tyre averages OMR 32.500. A) How much, if any would Geely Company save by buying the tyre from Bridgestone? B) Suppose 20% of fixed factory overhead is unavoidable, how much, if any, would Geely Company save by buying the tyre from Bridgestone? Make Buy

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