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What is the maximum purchase price the company

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Reference no: EM131773400

WLS Company currently makes a key component for their tractors in house. The costs are as follows:

Per Unit

Direct Materials $ 4.00
Direct Labor 6.00
Allocated Overhead 10.00

Total Cost $20.00

If the component is purchased from an outside vendor the company will reduce their overhead costs by 80%. What is the maximum purchase price the company should consider to move to an outside vendor without respect to any other issue? Label Answers

Reference no: EM131773400

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