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Make or Buy B2 FavorPro Productions produces a component essential for its main product. The management is considering whether to make the component in-house or

Make or Buy B2 FavorPro Productions produces a component essential for its main product. The management is considering whether to make the component in-house or to buy it from an external supplier. The following information is provided: Current Production Costs for In-House Manufacturing of 3,000 units Direct Materials $590,000 Direct labor 610,000 Manufacturing overhead 648,000 Total Manufacturing Cost $1,848,000 FavorPro Productions's annual manufacturing overhead budget is 25% variable and 75% fixed. Atlead Construction, one of FavorPro Productions's reliable vendors, has offered to supply the component at a unit price of $480. FavorPro Productions anticipates needing 3,000 units of the component each year. 2. Assume If FavorPro Productions stops producing the component in- house, it can use the freed capacity to produce another product, which would contribute $80,000 annually to the company's profits. If FavorPro Productions decides to purchase the 3,000 units from Atlead Construction, what would be the change to FavorPro Productions's cost

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