Manson Industries incurs unit costs of $7.20 ($4.40 variable and $2.80 fixed) in making a...
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Manson Industries incurs unit costs of $7.20 ($4.40 variable and $2.80 fixed) in making a subassembly part for its finished product. A supplier offers to make 20,000 of the assembly part at $5.14 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manson will realize by buying the part. Variable manufacturing costs. Fixed manufacturing costs Purchase price Total annual cost Should Manson make or buy the part? The decision should be to _______the part
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