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San Diego State University Operations And Supply Chain Management Assignment Help - Units

Question - Figure 12-2. ColorPro uses part 87A in the production of color printers. Unit manufacturing costs of part 87A are: Direct materials $8 Direct labor 2 Variable overhead 1 Fixed overhead-common costs 4 ColorPro uses 100,000 units of 87A per year. Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12. Fixed overhead is unavoidable. Refer to Figure 12-2. Now suppose that ColorPro discovers that other costs will increase by $7,000 per year if the component is purchased rather than made internally. Should ColorPro make or buy the part? a. buy the part because it will save $100,000 over making it b. make the part because it will save $107,000 over buying it c. buy the part because it will save $107 ...Read More

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