What is the maximum unit purchasing price

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Problem - 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 69 per cent. What is the maximum unit purchasing price that makes purchasing a beneficial decision in comparison to making?

Reference no: EM132765588

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