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Pnok Company has been purchasing a component, Part Q, for $18.90 a unit. Pnok is currently operating at 70% of capacity and no significant increase in production is anticipated in the near future. The cost of manufacturing a unit of Part Q, determined by absorption costing methods, is estimated as follows:
Direct Materials $11.25 Direct Labor 4.50 Variable factory overhead 1.12 Fixed factory overhead 3.15 Total $20.02
Prepare a differential analysis report, dated March 12 of the current year, on the decision to make or buy Part Q
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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