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A company incurs the following costs per unit in producing 45,000 units of Part X17 annwal. is a part that is used in making its

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A company incurs the following costs per unit in producing 45,000 units of Part X17 annwal. is a part that is used in making its nronduat Instead of making Part XYZ, the company can purchase the part at a price of $12 per unit. The company has determined that 70% of the fixed manufacturing overhead camot be avoided even if the part is purchased. Additionally, if the company purchases Part XYZ, it can generate rental income of $40,000 anmually by renting out the space in the factory that is currently being used to make the part. What would be the effect on profitability if the company decides to purchase Part XYZ instead of continuing to make it? Increase in profitabity of $85,000 Increase in profitabilty of $39,100 Increase in profitabity of $23,800 Decrease in proftabitity of $22,100 None of the above

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