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The Fine Furniture Company produces patio furniture including the various components used in its production. For the production of one of the components, the company
The Fine Furniture Company produces patio furniture including the various components used in its production. For the production of one of the components, the company incurs direct material costs of $4,000, direct labor costs of $4,000, variable overhead costs of $2,000 and fixed overhead costs of $8,000. If the company purchases the component from an outside supplier, $3,000 of the fixed costs can be eliminated. At what purchase price would the company be indifferent between making or buying
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