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MS produces handheld games. The costs of the digital screen are as follows: Direct Labor $6 per unit Direct Materials $8 per unit Variable Overhead

MS produces handheld games. The costs of the digital screen are as follows:

Direct Labor $6 per unit

Direct Materials $8 per unit

Variable Overhead $4 per unit

Fixed Overhead $10 per unit

MS is considering buying the digital screen from a Chinese manufacturer for $23 per unit. 60% of Fixed Overhead costs are unavoidable. What are the relevant costs of making the digital screen?

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