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Harvey Manufacturing incurs the following costs to make 5,000 units of a sub-assembly part included in its finished product. Direct materials $10,000 Direct labor 20,000

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Harvey Manufacturing incurs the following costs to make 5,000 units of a sub-assembly part included in its finished product. Direct materials $10,000 Direct labor 20,000 Variable overhead 25,000 Fixed overhead 50.000 Included in the $50,000 of fixed overhead is $3,000 spent to rent production equipment that could be avoided if Harvey did not manufacture this part. If Harvey buys the part from an outside supplier, it could use factory resources to make another product which is estimated to have a contribution margin of $12,000 An outside supplier offers to make 5,000 units for $15 per unit. What should Harvey do to maximize net income?! Direct labor 20,000 Variable overhead Fixed overhead 25,000 50,000 Included in the $50,000 of fixed overhead is $3,000 spent to rent production equipment that could be avoided if Harvey did not manufacture this part. If Harvey buys the part from an outside supplier, it could use factory resources to make another product which is estimated to have a contribution margin of $12,000 An outside supplier offers to make 5,000 units for $15 per unit. What should Harvey do to maximize net income? O Make, net income will be $5,000 greater. O Make, net income will be $20,000 greater. O Buy, net income will be $30,000 greater. O Buy, net income will be $15,000 greater

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