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Make-or-Buy Decision and Qualitative Factors.Soda Bottling, Inc., currently bottles its own soda drinks. Management is interested in outsourcing the production of bottles to a reputable manufacturing company that can supply the bottles for $0.04 each. Soda Bottling incurs the following monthly production costs to produce 1,000,000 bottles internally.

Total Monthly Cost at 1,000,000 Per Unit Units Variable production cost $0.02 $20,000 Fixed production cost 25,000 Total production cost $45,000