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The Culver Company manufactures 4,100 units of a part that could be purchased from an outside supplier for $ 16 each. Culver's costs to manufacture each part are as follows:
Direct materials $ 4Direct labor $3Variable manufacturing overhead $6Fixed manufacturing overhead $10 Total $ 23
All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses.
Problem (a) Calculate relevant cost to make.
Problem (b) Should Culver continue to manufacture the part?
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