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Tex's Manufacturing Company can make 100 units of a necessary component part with the following costs. Direct Materials: $105,000 Direct Labor: $25,000 Variable Overhead: $45,000
Tex's Manufacturing Company can make 100 units of a necessary component part with the following costs. Direct Materials: $105,000 Direct Labor: $25,000 Variable Overhead: $45,000 Fixed Overhead: $30,000. If Tex's Manufacturing Company can purchase the component externally for $190,000 and only $5,000 of the fixed costs can be avoided, what is the correct make-or-buy decision? Question 3 options:
Make and save $20,000
Make and save $10,000
Buy and save $20,000
Buy and save $10,000
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