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Xebex Pty Ltd is considering whether to make or buy a component used in the production of Faz Machines. The annual cost of producing the

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Xebex Pty Ltd is considering whether to make or buy a component used in the production of Faz Machines. The annual cost of producing the 100 000 components used by the company is as follows. Direct variable manufacturing costs Direct fixed manufacturing costs Allocated overhead $ $ 300 000 100 000 50 000 If Xebex were to discontinue production of the component, direct fixed manufacturing costs would be reduced by 80 per cent. What are the irrelevant costs in the decision? Select one: a. $80 000 b. $70 000 c. $20 000 d. $50 000

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