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Q-4 Cool Inc, owns a machine that produces baskets for the gift packages the company...

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Accounting

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Q-4 Cool Inc, owns a machine that produces baskets for the gift packages the company sells. The company uses 1,000 baskets in production each month. The costs of making one basket is $7 for direct materials, $5 for variable manufacturing overhead, $4 for direct labour and $8 for fixed manufacturing overhead. The unit cost is based on the monthly production of 1,000 baskets. The company determined that 25% of the fixed manufacturing overhead is avoidable. An outside supplier has offered to sell Cool the baskets for $15 each, and can supply all the units ituneeds. Prepare an incremental analysis to determine if. Cool should buy the component from canadahanson.com

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