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Required information PR 2-58 (Algo) Variable and Fixed Costs; Make or Buy a Component (LO 2-8, 2-10) [The following information applies to the questions displayed
Required information PR 2-58 (Algo) Variable and Fixed Costs; Make or Buy a Component (LO 2-8, 2-10) [The following information applies to the questions displayed below.] Hoboken Industries currently manufactures 47,000 units of part MR24 each month for use in production of several of its products. The facilities now used to produce part MR24 have a fixed monthly cost of $235,000 and a capacity to produce 92,500 units per month. If the company were to buy part MR24 from an outside supplier, the facilities would be idle, but its fixed costs would continue at 40 percent of their present amount. The variable production costs of part MR24 are $15 per unit. R 2-58 (Algo) Part 1: If Hoboken Industries continues to use... equired: If Hoboken Industries continues to use 47,000 units of part MR24 each month, it would realize a net benefit by purchasing part R24 from an outside supplier only if the supplier's unit price is less than what amount
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