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A company is considering the proposal of buying a spare part from out which has been produced in the company. The spare part data

A company is considering the proposal of buying a spare part from out which has been produced in the company. The spare part data is as follows: Variable cost per unit: $. Material 80 Labour 28 Overhead 14 Fixed cost per unit: 8.4 Depreciation Others 10 140.4 If the unit cost is (a) $. 130 (b) $. 120 suggest whether it is better to make or buy the spare part.

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