Question 3: A company produces Cars, and purchasing the wheels for $ 100 per unit....
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Question 3: A company produces Cars, and purchasing the wheels for $ 100 per unit. The management thinks to produce the wheels instead of purchasing it. The cost of producing is as follows: Variable cost $40 Fixed cost: New fixed cost to rent new equipment to produce the battery $250,000 General fixed cost (old fixed cost) $100000. The quantity of wheels 5000 Do you advice the company to produce the wheels or not? Justify?
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