Manama Inc. is now producing TVs. The companys accounting department reports the following costs of...
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Accounting
Manama Inc. is now producing TVs. The companys accounting department reports the following costs of producing 100,000 units of the TVs each year:
Direct Materials $4
Direct Labor $2
Variable Overhead $2
Fixed cost $ 3.5
An outside supplier offered to sell 100,000 units to Manama Company at a price of only $10 each.
Required: Should the company stop producing the TVs internally or buy them from the outside supplier?
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