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Glass Corporation is currently thinking about purchasing a part for one of its products instead of manufacturing it. The part requires $8.10 of direct materials
Glass Corporation is currently thinking about purchasing a part for one of its products instead of manufacturing it. The part requires $8.10 of direct materials and $5.10 of direct labor to manufacture it. In addition, $1.70 of variable overhead is used in production. Fixed overhead costs per unit are $2.90 but 20% of this cost can be eliminated if the part is purchased. To satisfy demand for the product, they would have purchase 12,300 of these parts each year. In addition, manufacturing the part uses 4 minutes on a machine that is considered a constrained resource. If the part is purchased, this would allow production of another product that requires 8 minutes on this machine and that product has a contribution margin of $4.50 per unit. What are the total incremental revenues associated with this decision? (Round your intermediate calculations to 2 decimal places) Multiple Choice $239,481 o $211,806 O $218,079 O $210,945 O $190,404
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