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24. MB Industries manufactures 15,000 components per year. Their manufacturing costs are: Direct materials $150,000 Direct labor $240,000 Variable overhead $90,000 Fixed overhead $120,000 There

24. MB Industries manufactures 15,000 components per year. Their manufacturing costs are:

Direct materials $150,000

Direct labor $240,000

Variable overhead $90,000

Fixed overhead $120,000

There are no alternative uses for the facilities used in making the components. An outside supplier is offering to sell the component to MB for $34 per unit. Should MB make or buy the component?

a.

Make, because otherwise (if it buys), income would decrease by $30,000

c.

Buy, because otherwise (if it makes), income would decrease by $30,000

b.

Make, because otherwise (if it buys), income would increase by $30,000

d.

Buy, because otherwise (if it makes), income would increase by $30,000

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