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Vandeley Industries currently manufactures a subassembly for its main product. The costs per unit are as follows: Direct Materials 4 Direct Labour 30 Variable Overhead

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Vandeley Industries currently manufactures a subassembly for its main product. The costs per unit are as follows: Direct Materials 4 Direct Labour 30 Variable Overhead 15 Fixed Overhead 25 Total $ 74 Rupert Ltd has contacted Vandeley with an offer to sell it 5,000 subassemblies for $55.00 each Required (a) should Vandeley make or buy the subassemblies? (3 points) (b) The accountant decided to investigate the fixed costs to see whether any incremental changes would occur if the subassembly were no longer manufactured. The accountant believes that Vandeley will eliminate $50 000 of fixed overhead if it accepts the proposal. Does this new information change the decision? Show your calculations - assume the costs above for the production of 5,000 units. (3 points) (c) What qualitative factors are important for accountants and managers to consider for Vandeley's make or buy decision? Please discuss three distinct factors and explain their importance. (3points) A B V !!! III % 3 US X1 x 11 MacBook Pro

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