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AZ, a tube producing Co. specializes in the manufacture of car tubes and sometimes outsources others Co. CC offers to supply the tubes currently being
AZ, a tube producing Co. specializes in the manufacture of car tubes and sometimes outsources others
Co. CC offers to supply the tubes currently being made by AZ at Ugx.7,000 per tube
The costs currently incurred by AZ are
Variable costs 4,000
Traceable fixed costs 2,000
Allocated fixed costs 3,000
Assume for now the productive capacity released by accepting the offer will remain idle Assume a monthly 5,000 tubes is required; should the Co.AZ continue making or should outsource from CC.
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