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Vaughn Industries can produce 400 units of a necessary component part with the following costs:
Direct Materials $75700
Direct Labour 20100
Variable Overhead 60200
Fixed Overhead 9000
Problem 1: If Vaughn Industries purchases the component externally, $3000 of the fixed costs can be avoided. What minimum external price for the 400 units would Vaughn choose to buy instead of make?
options:
option 1: $165000
option 2: $159000
option 3: $95800
option 4: $156000
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