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Harvey Automobiles 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

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Harvey Automobiles 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. By outsourcing the part, the company can avoid 30% of the fixed costs. Harvey buys the part, what is the most Harvey Automobiles can spend per unit so that operating income equals the operating income from making the part? A. $1.30 B. $2.33 C. $4.05 D. $1.95

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