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Question - Tankers Corporation currently manufactures 17,000 staplers annually for its main product. The costs per stapler are as follows:
Direct materials $2.50
Direct labour 7.50
Variable overhead 3.00
Fixed overhead 8.00
Total $21.00
Morse Company has contacted Tankers with an offer to sell it 17,000 staplers for $19.00 each. $6 of the fixed overhead per unit is unavoidable. Prepare an incremental analysis for the make or buy decision.
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