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Incremental Analysis for Make or Buy Decision : A company is considering whether to make a component internally or buy it from an external supplier.
Incremental Analysis for Make or Buy Decision: A company is considering whether to make a component internally or buy it from an external supplier. The relevant costs for making the component internally are: direct materials $10 per unit, direct labor $15 per unit, variable overhead $5 per unit, and fixed overhead $20,000 per month. The supplier offers to sell the component for $45 each. Determine whether the company should make or buy the component.
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