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Question Il Sydney Company manufactures part PECIANO used in several of its product models. 10,000 units are produced each year with production costs as follows:

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Question Il Sydney Company manufactures part PECIANO used in several of its product models. 10,000 units are produced each year with production costs as follows: Direct materials $ 45,000 Direct manufacturing labor $15,000 Variable support costs $35,000 Fixed support costs $25,000 Total costs $120,000 Sydney Company has the option of purchasing part PECIANO from an outside supplier at $11.20 per unit. If PECIANO is outsourced, 40% of the fixed costs cannot be immediately converted to other uses. a. Describe avoidable costs. What amount of the PECIANO production costs is avoidable? b. Based on financial considerations, should Armidale Truck outsource PECIANO? Why or why not

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