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Teich Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 13,

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Answer #1
Calculation of relevant cost of making
Direct material 9.1
Direct labor 6.1
Variable manufacturing overhead 1.9
Avoidable fixed overhead 1.17 (3.9*0.3)
Opportunity cost 2.75 (5.5/2)
Cost of making the component 21.02 per unit
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