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Lasso Corporation manufactures a variety of appliances which all use Part 389. Currently, Lasso manufactures Part 389 itself. It has been producing 11,000 units of

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Lasso Corporation manufactures a variety of appliances which all use Part 389. Currently, Lasso manufactures Part 389 itself. It has been producing 11,000 units of Part 389 annually. The annual costs of producing Part 389 at the level of 11,000 units include: Direct materials $3.40 Direct labor $8.40 Variable manufacturing overhead $4.00 Fixed manufacturing overhead $3.10 Total cost $18.90 All of the fixed manufacturing overhead costs would continue whether Part B89 is made internally or purchased from an outside suppler. Assume Lasso can purchase 11.000 units of the part from the Nadal Parts Company for $20.10 each, and the facilities currently used to make the part could be used to manufacture 11,000 units of another product that would have a $8 per unit contribution margin. If no additional fixed costs would be incurred, what should Lasso do? A. Make the new product and buy the part to earn an extra 56.80 per unit contribution to profit. B. Continue to make the port to earn an extra $4.90 per unit contribution to profit, OC. Make the new product and buy the part to eat an extra $3.70 per unit contribution to profit. OD. Continue to make the part to earn an extra $8.40 per unit contribution to profit

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