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ABC currently buys 9000 subcomponents from outside supplier at SR 10 each. The company management...

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Accounting

ABC currently buys 9000 subcomponents from outside supplier at SR 10 each. The company management is thinking about producing the subcomponent internally. The variable cost to produce it woubd be SR7 per unit and the company would incur additional fixed cost SR25,000 what is the advantage or disadvantage If ABC makes the subcomponent instead of continuing to buy outside.

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