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Lasso Corporation manufactures a variety of appliances which all use Part 389. Currently, Lasso manufactures Part 889 tself. It has been producing 9,000 units of
Lasso Corporation manufactures a variety of appliances which all use Part 389. Currently, Lasso manufactures Part 889 tself. It has been producing 9,000 units of Part 889 annually. The annual costs of producing Part 389 at the level of 9,000 units include: Direct materials $3.00 Direct labor $8.00 Variable manufacturing overhead $400 Fixed manufacturing overhead $3.00 Total cost $18.00 All of the fixed manufacturing overhead costs would continue whether Part 389 is made internally or purchased from an outside supplier. Assume Lasso can purchase 9,000 units of the part from the Nadal Parts Company for $20.50 each, and the facilities currently used to make the part could be used to manufacture 9,000 units of another product that would have a $7 per unit contribution margin. If no additional fixed costs would be incurred what should lasso do? O A Continue to make the part to earn an extra $400 per unit contribution to profit B. Make the new product and buy the part to cam an extra $1.50 per unt contribution to profit Oc Continue to make the part to earn an extra $8.00 per unit contribution to profil OD. Make the new product and buy the part to eam an extra $4.50 per unit contbution to profit
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