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Adams Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9 , 3 0
Adams Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of
producing containers follows.
Onethird of these costs can be avoided by purchasing the containers.
Russo Container Company has offered to sell comparable containers to Adams for $ each.
Required
a Calculate the total relevant cost. Should Adams continue to make the containers?
b Adams could lease the space it currently uses in the manufacturing process. If leasing would produce $ per month, calculate
the total avoidable costs. Should Adams continue to make the containers?
Answer is complete but not entirely correct.
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