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HAB uses a standard part in the manufacture of several of its trucks. The cost of producing 40,000 parts is $120,000, which includes fixed costs

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HAB uses a standard part in the manufacture of several of its trucks. The cost of producing 40,000 parts is $120,000, which includes fixed costs of $60,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $4.00 per unit, and avoid 70% of the fixed costs. Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can be sold for $12,000 profit. If HAB makes the part, the operating income be greater/less than if the company bought the part. Note: if Operating income will be greater for example by $3,000, write 3000; if operating income will be less by $3,000, write-3000

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