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A company manufactures chips used in the production of computers. The chips can be purchased for $30 each from an outside vendor. It costs the
A company manufactures chips used in the production of computers. The chips can be purchased for $30 each from an outside vendor. It costs the manufacturer $40 a chip to produce them, of which 30% is fixed overhead cost. What are the relevant costs for this decision? Based on these costs, which option should the company choose? Relevant Costs (Manufacture and Purchase) Decision a. $30 and $28 Manufacture b. $30 and $28 Purchase c. $28 and $20 Purchase d. $28 and $20 Manufacture
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