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The Janeera Company can make 100 units of a necessary component part with the following costs: Direct Materials $120.000 Direct Labor 25,000 Variable Overhead45.000 Fixed
The Janeera Company can make 100 units of a necessary component part with the following costs:
Direct Materials $120.000
Direct Labor 25,000
Variable Overhead45.000
Fixed Overhead 30.000
If the Janeera 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?
a. Buy and save $5,000
b. Make and save $15,000
c. Buy and save $15,000
d. Make and save $5,000
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