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Bob's Burgers currently has revenues of $6,250,000. Its costs consist of $1,250,000 in direct materials, $640,000 in direct labor, $750,000 in overhead, and $2,000,000
Bob's Burgers currently has revenues of $6,250,000. Its costs consist of $1,250,000 in direct materials, $640,000 in direct labor, $750,000 in overhead, and $2,000,000 of marketing costs. Bob's is considering reorganizing its production process at a cost of $90,000, which would reduce direct labor costs to $480,000. Should Bob's reorganize?
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