What is maximum unit purchasing price that makes purchasing

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Reference no: EM133419466

Question: A manufacturer is considering whether to make or buy a component used in its production. The annual cost of producing the 10 000 parts is as follows.

Direct variable manufacturing costs $ 300 000
Direct fixed manufacturing costs $ 100 000
Allocated overhead $ 50 000

If the manufacture buys the component, the direct fixed manufacturing costs can be reduced by 68 per cent. What is the maximum unit purchasing price that makes purchasing a beneficial decision in comparison to making?

Reference no: EM133419466

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