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Bovee Company Manufactures a Part for Its Production Cycle

Question 93

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Bovee Company manufactures a part for its production cycle. The costs per unit for 10,000 units of this part are as follows:
Bovee Company manufactures a part for its production cycle. The costs per unit for 10,000 units of this part are as follows:    The fixed factory overhead costs are unavoidable. -Clarke Company has offered to sell 10,000 units of the same part to Bovee for $104 a unit. Assuming no other use for the facilities, Bovee should A)  make the part as this would save $8 per unit. B)  buy from Clarke as this would save $20 per unit. C)  make the part as this would save $20 per unit D)  buy from Clarke as this would save $8 per unit. The fixed factory overhead costs are unavoidable.
-Clarke Company has offered to sell 10,000 units of the same part to Bovee for $104 a unit. Assuming no other use for the facilities, Bovee should


A) make the part as this would save $8 per unit.
B) buy from Clarke as this would save $20 per unit.
C) make the part as this would save $20 per unit
D) buy from Clarke as this would save $8 per unit.

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