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What is correct make-or-buy decision

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Reference no: EM13139248

Fornelli, Inc. can produce 100 units of a component part with the following costs:

Direct materials $30,000
Direct labor 13,000
Variable overhead 32,000
Fixed overhead 22,000

If Fornelli, Inc. can purchase the component part externally for $88,000 and only $8,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?

Reference no: EM13139248

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