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Murray Corp. currently makes 5,850 subcomponents a year in one of its factories. The unit costs to produce are: Description Per unit Direct materials $7
Murray Corp. currently makes 5,850 subcomponents a year in one of its factories. The unit costs to produce are:
Description | Per unit |
Direct materials | $7 |
Direct labor | 2 |
Variable manufacturing overhead | 1 |
Fixed manufacturing overhead | 2 |
An outside supplier has offered to provide Murray Corp. with the 5,850 subcomponents at a $15 per unit price. Fixed overhead is not avoidable. What is the maximum price Murray Corp. should pay the outside supplier?
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