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Acme Company plans to outsource production of a component part that it currently produces in - house. At the budgeted annual production level of 1
Acme Company plans to outsource production of a component part that it currently produces inhouse. At the budgeted annual production level of units, Acme's perunit manufacturing costs of the part are as follows: direct materials $ direct labor $ variable overhead $ and fixed overhead $ Producing one unit of the part inhouse requires hours of machine time. If Acme buys the part from an outside supplier, Acme will avoid of the fixed overhead costs and Acme can use the freedup machine time to manufacture another product that requires hours of machine time per unit to produce and has a contribution margin of $ per unit. What is the maximum perunit purchase price that Acme can pay the outside supplier and break even on this outsourcing decision? Round to the nearest whole dollar amount and do not enter a dollar sign or a decimal point eg enter not $:
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