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Barber Manufacturing currently makes 2,000 units of gas-powered leaf blowers each year. However, the company has found a manufacturing company that can provide the blowers

Barber Manufacturing currently makes 2,000 units of gas-powered leaf blowers each year. However, the company has found a manufacturing company that can provide the blowers at a price of $14 each. The company is considering purchasing the blowers. If the company purchases the blower, the machine can be used to produce 5,000 units of another product that would generate a contribution of $2 per unit. There will be no need of supervisor if Barber goes for outsourcing. Barber's standard cost for a blower is listed below.

Direct Material...................................................................................................... $4

Direct labor..........................................................................................................2

Variable cost.........................................................................................................3

Fixed Cost

Depreciation ..................................................................................... 3

CEO's Salary.......................................................................................2

Supervisor's salary (directly connected with blower)......49

Cost per unit$18

Required: Should Barber purchase the blower outside or make it at his own

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