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Vaughn Company has contacted Ivanhoe Inc. with an offer to sell it 4900 wickets for $19.00 each. If Ivanhoe makes the wickets, variable costs are
Vaughn Company has contacted Ivanhoe Inc. with an offer to sell it 4900 wickets for $19.00 each. If Ivanhoe makes the wickets, variable costs are $12 per unit. Fixed costs are $12 per unit; however, $4 per unit is avoidable. Should Ivanhoe make or buy the wickets? What are the savings of this choice? Buy: savings = $14700 Make; savings = $29400 Make; savings = $14700 Buy; savings = $19600
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