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Moana Publishing operates a book binding division. Company management is co outsourcing the binding process at a cost of S binding costs are $26.50 per
Moana Publishing operates a book binding division. Company management is co outsourcing the binding process at a cost of S binding costs are $26.50 per book, including fixed costs of S4,000 for the 1,000 books annually. 75 percent of the fixed costs can be avoided if the binding is outsourced. V would you recommend Moana do in this situation, and what will be the effect on i a) Indiferent between making internally and outsourcing; no impact on income. b) Make internally; increases income by $500. 5. 25 per book. The current average internal c) Make internally; increases income by $1,500. d) Outsource; increases income by $500. e) Outsource; increases income by $1,500
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