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Part A is used in one of ABC Co's products. ABC reported the following information about producing the 15,800 units of the part. Please
Part A is used in one of ABC Co's products. ABC reported the following information about producing the 15,800 units of the part. Please note the following acronyms. DM: Direct materials DL: Direct labor VOH: Variable overhead. DM DL VOH Manager's salary Depreciation of equipment Allocated general overhead Per Unit $ 2.70 $3.70 $6.50 $7.00 $8.10 $5.20 An outside supplier offered to make the part and sell it to ABC for $29.00 each. If ABC accepted the offer, the manager's salary and all variable costs will be avoided. The equipment used to make the part has zero value or other use. If the outside supplier's offer were accepted, only $21,800 of the allocated general overhead costs can be avoided. Required: a.What's the financial impact if ABC buys part A from the supplier? b. Should ABC buy or make part A? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a report that shows the financial impact of buying part U67 from the supplier rather than continuing to make it inside the company. DM DL VOH Manager's salary Depreciation of equipment Allocated general overhead Purchase price from outside supplier Total cost Make. Buy
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