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A manufacturing company is faced with a make or buy decision for a particular product line. The variable costs for each unit of the product

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A manufacturing company is faced with a make or buy decision for a particular product line. The variable costs for each unit of the product are comprised of 518 for direct materials, $10 for direct labor and $7 for variable overhead. Assume that fixed costs would remain the same under both the make and buy decisions. The company is offered a price of $35 per unit from an external supplier for an identical product. Which of the following statements is true? Select one a. The company should buy the product from the external supplier, as this would save the company $10 per unit. b. The company would save $7 per unit if it manufactured the products in-house. c. The company would be indifferent to the make or buy decision d. The company should buy the product from the external supplier, as this would save the company $7 per unit

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