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The Park Avenue Corporation currently makes a part required in its finished product. The company uses 2,116 units of this part annually. Park Avenue Corp
The Park Avenue Corporation currently makes a part required in its finished product. The company uses 2,116 units of this part annually. Park Avenue Corp has been approached by a vendor to provide this part for $13.04 each. The following cost information is provided
Direct Materials per unit | $6.34 |
Direct Labor per unit | $7.30 |
Variable Factory Overhead per unit | $2.50 |
Fixed Factory Overhead per unit | $7.50 |
How much would Park Avenue Corporation save by having the vendor make the part, instead of making it themselves?
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