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Sunland Company, Inc. can produce 100 units of a component part with the following costs: Direct Materials $ 25000 Direct Labor 9500 Variable Overhead 23000
Sunland Company, Inc. can produce 100 units of a component part with the following costs:
Direct Materials | $ 25000 |
Direct Labor | 9500 |
Variable Overhead | 23000 |
Fixed Overhead | 11000 |
If Sunland Company can purchase the component part externally for $ 62000 and only $ 4000 of the fixed costs can be avoided, what is the correct make-or-buy decision?
Buy and save $ 4500
Make and save $ 500
Buy and save $ 2500
Make and save $ 2500
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