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Required information Exercise 11-30 (Algo) Relevant Cost Exercises [LO 11-1, 11-2, 11-3, 11-4, 11-7] [The following information applies to the questions displayed below.) Each
Required information Exercise 11-30 (Algo) Relevant Cost Exercises [LO 11-1, 11-2, 11-3, 11-4, 11-7] [The following information applies to the questions displayed below.) Each of the following situations is independent: Part a (Algo) Make or Buy Terry Incorporated manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 2,300 units of product OP89 for $179,400. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs: Cost per Direct materials Direct labor Variable overhead Allocated fixed overhead Required: Unit $ 34 24 22 4 1. What is the relevant cost per unit to make the product internally? 2. What is the estimated increase or decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier? Complete this question by entering your answers in the tabs below. Required 1 Required 2
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