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Exercise 5A: Produce or buy an item (Value: 15 points) The company BB Inc. manufactures a piece X for its annual production. The following table
Exercise 5A: Produce or buy an item (Value: 15 points) The company BB Inc. manufactures a piece X for its annual production. The following table presents information on production costs at a certain level. Production level Direct materials Direct labor Variable manufacturing indirect costs Fixed indirect manufacturing costs Total costs per unit 30,000 units $ 7.20 S 10.50 $ 4.80 S 15.00 S 37.50 BB Inc. received an offer to buy 30.000 units of the piece already manufactured for $ 35.25 per unit. There are fixed hints of $ 9 per unit that would be maintained even if they were purchased. However, buying the piece would allow BB Inc. to rent the production area for $ 200,000 annually Required: Prepare a report comparing both alternatives and reflect how much the profit would increase or decrease if you decide to buy the piece. You must include all the computations made
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