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Hello. I need help with this accounting questiuon. Please do not leave anything out. Thank you Make or Buy Omark Corporation currently manufactures a sub-assembly
Hello. I need help with this accounting questiuon. Please do not leave anything out. Thank you
Make or Buy Omark Corporation currently manufactures a sub-assembly for its main product. The manufacturing costs for the sub-assembly PER UNIT are as follows Direct materials Direct labor Variable overhead Fixed overhead $2.00 20.00 10.00 16.00 $48.00 Total Reliance Corporation has contacted Omark with an offer to sell Omark the sub-assemblies for $44 each. $50,000 of total fixed overhead costs can be eliminated if the sub-assemblies are purchased from Reliance. Omark produces 5,000 sub-assemblies each period. Should Omark continue to make the sub-assemblies themselves or should they purchase the sub-assemblies from Reliance Corporation? WhyStep by Step Solution
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