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SHOW ALL WORKING AND CALCULATIONS PLEASE Armidale Manufacturing produces Part XM for its main product, XMT Hardware. The company's 2016 books reveal the following per
SHOW ALL WORKING AND CALCULATIONS PLEASE
Armidale Manufacturing produces Part XM for its main product, XMT Hardware. The company's 2016 books reveal the following per unit cost of Part XM: Tamworth Manufacturing has offered Armidale Manufacturing to sell them 7,000 of the Part XM for $89.00 each. Armidale Manufacturing, if agrees to the offer, will be able to avoid/eliminate $140,000 of fixed overhead costs. 1. How much are the total relevant costs for Armidale Manufacturing? 2. If you are a management accountant at Armidale Manufacturing, would you decide to buy Part XM of Tamworth Manufacturing or continue to manufacture the part in-house? Work out the difference in financial value between the two alternatives? What 'qualitative factors' (write any two) you should consider before making the decision under Part AStep by Step Solution
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