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Moon Appliance manufactures a variety of appliances which all use Part 689. Currently, Moon Appliance manufactures Part By itself, it has been producing 9.000
Moon Appliance manufactures a variety of appliances which all use Part 689. Currently, Moon Appliance manufactures Part By itself, it has been producing 9.000 units of Part DB9 annually. The annual costs of producing Part 889 at the level of 9,000 units include Direct materials Direct labor $3.00 $8.00 Variable manufacturing overhead $5.00 Eixed manufacturing.overhead $2.00 Total cost -$ 18.00 All of the fixed manufacturing overhead costs would continue whether Part B89 is made internally or purchased from an outsic supplier. Assume Moon Appliance can purchase 9,000 units of the part from the Nadal Parts Company for $20.00 each, and th facilities currently used to make the part could be used to manufacture 9.000 units of another product that would have a $8 unit contribution margin. If no additional fixed costs would be incurred, what should Moon Appliance do? O Make the new product and buy the part to earn an extra $6.00 per unit contribution to profit. O Make the new product and buy the part to earn an extra $4.00 per unit contribution to profit. O Continue to make the part to earn an extra $4.00 per unit contribution to profit. O Continue to make the part to earn an extra $2.00 per unit contribution to profit.
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