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$ A > Blossom, Inc. owns a machine that produces baskets for the gift packages the company sells. The company uses 720 baskets in production
Blossom, Inc. owns a machine that produces baskets for the gift packages the company sells. The company uses 720 baskets in production each month. The costs ot making one basket are $3 tor direct materials, $2 for variable manufacturing overhead, $1 for direct labor. and $4 for fixed manufacturing overhead. The unit cost is based on the monthly production ot 720 baskets. The company determined that 30% of the fixed manufacturing overhead is aw'idable. An outside supplier has offered to sell Blossom the baskets for $9 each, and can supply all the units it needs. prepare an incremental analysis to determine if Blossom should buy the baskets from the supplier, either a r.tive precedirw e.g. 45 (451,)
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