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Trey's Trucks uses a standard part in the manufacture of several of its trucks. The cost of producing 90,000 parts is $130,000?, which includes fixed costs of $80,000 and variable costs of $50,000.
The company can buy the part from an outside supplier for $3.00 per unit and avoid? 30% of the fixed costs.
Problem 1: If the company makes the? part, how much will its operating income? be?
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