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The Outland Company manufactures 5,000 units of a part that could be purchased from an outside supplier for $16 each. Outland's costs to manufacture each
The Outland Company manufactures 5,000 units of a part that could be purchased from an outside supplier for $16 each. Outland's costs to manufacture each part are as follows: $4 3 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total 6 10 $23 All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses. (c-d) (c) If Outland could lease the manufacturing facilities to another company for $25,000 per year, what would be the net total cost to outsource production of the part? Net cost to buy $ (d) Should Outland outsource production of the part given the opportunity to lease the facilities? e Textbook and Media Save for Later Attempts: 0 of 4 used Submit
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