Assume that a firm has prepared the following cost estimates for the m

Assume that a firm has prepared the following cost estimates for the manufacture of a sub assembly component based on an annual production of 8,000 units.Per UnitTotalDirect materials$5$40,000Direct labor$4$32,000Variable factory overhead applied$4$32,000Fixed factory over head applied (150% of direct labor cost)$6$48,000Total Cost$19$152,000The supplier has offered to provide the subassembly at a price of $16 each. Two-thirds of fixed factory overhead, which represents executive salaries, rent, depreciation, and taxes, continue regardless of the decision. Should the company buy or make the product?

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Assume that a firm has prepared the following cost estimates for the m

Assume that a firm has prepared the following cost estimates for the manufacture of a sub assembly component based on an annual production of 8,000 units.Per UnitTotalDirect materials$5$40,000Direct labor$4$32,000Variable factory overhead applied$4$32,000Fixed factory over head applied (150% of direct labor cost)$6$48,000Total Cost$19$152,000The supplier has offered to provide the subassembly at a price of $16 each. Two-thirds of fixed factory overhead, which represents executive salaries, rent, depreciation, and taxes, continue regardless of the decision. Should the company buy or make the product?

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Best writer takes the order

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