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Sam's Manufacturing Company can make 100 units of a necessary component part with the following...

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Accounting

Sam's Manufacturing Company can make 100 units of a necessary component part with the following costs:

Direct materials $80,000

Direct labor $13,000

Variable overhead $40,000

Fixed overhead $27,000

If Sam's manufacturing company can purchase the component externally for $145,000 and only $4,000 of the fixed costs can be avoided, what is the correct "make or buy" decision?

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