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Question - Aitken Corp currently makes 20,000 subcomponents a year in one of its factories. The unit costs to produce are:
Per unit
Direct materials
$15
Direct labor
10
Variable manufacturing overhead
15
Fixed manufacturing overhead
Total unit cost
$55
An outside supplier has offered to provide Aitken Corp with the 20,000 subcomponents. What is the maximum price Aitken Corp should pay the outside supplier?
A) $40
B) $45
C) $50
D) $55
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