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Question 2 (30 marks) 1. XYZ Company reports the following per unit cost information for making 12-ounce Glass Bottles: Direct materials Direct labour Variable Overhead

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Question 2 (30 marks) 1. XYZ Company reports the following per unit cost information for making 12-ounce Glass Bottles: Direct materials Direct labour Variable Overhead Fixed Overhead Total Cost Cost per Bottle GH20.06 0.02 0.04 0.08 0.20 offers to sell XYZ the bottles for $0.18 per bottle. For the moment, suppose the capacity now The Company currently produces 1,000,000 12 ounce plass bottles. Another manufacturer , the 50,000 supervisor's salary is the only fixed cost that the company would eliminate. Required: a) Should XYZ make or buy the bottles? Show your analysis b) Describe three qualitative factors XYZ Company management should take into consideration before taking a decision to purchase the bottles from the outside supplier. 12 marks a 3 marks

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