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Damon Industries manufactures 1 8 , 0 0 0 components per year. The manufacturing costs of the components were determined as follows: Direct materials $
Damon Industries manufactures components per year. The manufacturing costs of the components were determined as follows:
Direct materials $
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
An outside supplier has offered to sell the component for $ If Damon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $ If Damon purchases the component from the supplier instead of manufacturing it the effect on operating profits would be a:
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