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What is the maximum price that the company may pay to buy

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A department makes a product whose contribution per unit is £2000, and which takes 20 hours of machine time. A component used in this product with a marginal cost of £300 (taking 5 hours of machine time) could be purchased from an external supplier. The department is working at full capacity.

Problem 1: What is the maximum price that the company may pay to buy the component from an external supplier?

Reference no: EM132934156

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