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Home Q & A Board Other Fields Homework Help Business Accounting
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bernie2981 bernie2981
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8 years ago
Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 40,000 parts is $120,000, which includes fixed costs of $60,000 and variable costs of $60,000. By outsourcing the part, the company can avoid 30% of the fixed costs.

If Harvey Automobiles buys the part, what is the most Harvey Automobiles can spend per unit so that operating income equals the operating income from making the part?
A) $1.30
B) $1.95
C) $2.33
D) $4.05
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Managerial Accounting

Managerial Accounting


Edition: 4th
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nucleinuclei
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bernie2981 Author
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#2
8 years ago
Answers my question perfectly.
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#3
3 years ago
Thank you
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