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Weston Corporation currently makes Part # 5 0 0 , used in its manufacturing of engines. At 1 5 , 0 0 0 units, the
Weston Corporation currently makes Part # used in its manufacturing of engines. At units, the total cost of making Part # is $ computed as follows: Direct Labor $$ per unit; Direct Materials $$ per unit; Variable Overhead $$ per unit; Fixed Overhead $ An outside vendor has offered to supply Weston with units of Part # for $ If the company accepts the offer, its fixed overhead costs will be reduced by $ If Weston buys the parts instead of continuing to manufacture them, the company will save $ At a total purchase price of $ the company would be indifferent between making or buying units of the part. Hint: The amount must be more than the current purchase price of $
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