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Question - A company produces 2,000 component parts that are used in one of its products. The unit product cost of the component part is:
Variable manufacturing cost $7.50
Fixed manufacturing cost 6.00
Unit product cost $13.50
The component part can be purchased from an outside supplier for $10 per unit. If the part is purchased from the outside supplier, two-thirds of the fixed manufacturing costs could be eliminated. If the company purchases the part from the outside supplier, what the company's net operating income?
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