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A radio manufacturer has an annual production level of 50,000 units. At this production level, the cost per unit for a radio is as follows:
A radio manufacturer has an annual production level of 50,000 units. At this production level, the cost per unit for a radio is as follows: An outside supplier has offered to sell the radios to the firm for $26.20 per unit. If the firm accepts this offer, then they will not need to employ the supervisor. Also, if the radios are purchased from the outside supplier, then 40% of the fixed manufacturing overhead costs can be eliminated. Assuming that there are no other uses for the facility space that the firm uses to manufacture the radios, what is the annual impact to the company's profit if it buys the radios from the supplier instead of manufacturing them
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