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When deciding whether or not to discontinue a product line, which of the following is true? a. Allocated common company costs are unavoidable costs and therefore irrelevant to the decision. b. Common company costs will be incurred whether the product line is dropped or not and are therefore relevant to making the decision. Oc Only the fixed portion of common company costs is relevant to the decision of dropping a product line. d. As long as common company costs are allocated based on sales revenue they are relevant to the decision of dropping a product line. Fir Company currently manufactures one of the components it uses in its main product. The costs to produce 5,000 of these components last year were as follows: Cost per drive Direct materials $ 12 Direct labor 2 Variable manufacturing overhead 5 Fixed manufacturing overhead Total $ 26 Fir has an opportunity to purchase the 5,000 components from an outside supplier for $28 each. This will allow Fir to rent the space currently used to make the components for $40,000 per year. If all of the variable costs and 53 per unit of the fixed costs are avoidable, would Fir be better off making the components or buying them and by how much? a $30,000 better to buy b. $30,000 better to make C. $15,000 better to buy d. $10,000 better to buy

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