Bovee Company manufactures a part for its production cycle. The costs per unit for10,000 units of this part are asfollows:

Direct materials

$ 24

Direct labour

40

Variable factory overhead

32

Fixed factory overhead

16

Total costs

$112

The fixed factory overhead costs are unavoidable.

Assume that Bovee can buy10,000 units of the part from another producer for$120 each. The facilities currently used to make the part could be rented out to another manufacturer for$160,000 a year.

Bovee should

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