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7 Max Company uses 20,000 units of Part A in producing its products. A supplier offers to make Part A for $7. Max Company has

7

Max Company uses 20,000 units of Part A in producing its products. A supplier offers to make Part A for $7. Max Company has relevant costs of $8 a unit to manufacture Part A. If there is excess capacity, the opportunity cost of not buying Part A from the supplier is

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$140,000.

$160,000.

$0.

$20,000.

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