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What is the correct make-or-buy decision

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Reference no: EM132780426

Question - Fornelli, Inc. can produce 100 units of a component part with the following costs:

Direct Materials $15,000

Direct Labor 6,500

Variable Overhead 16,000

Fixed Overhead 11,000

If Fornelli, Inc. can purchase the component part externally for $44,000 and only $4,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?

Reference no: EM132780426

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