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to make a part are: direct material, $15; direct labor, $27; variable overhead, $15; and applied fixed overhead, $32. Purple Tree has received a quote of $60 from a potential supplier for this part. If Purple Tree buys the part, 75 percent of the applied fixed overhead would continue. They need 12,000 units of the specialized part.  Purple Tree Company would be better off by Group of answer choices $60,000 to buy the part. $348,000 to buy the part. $30,000 to manufacture

to make a part are: direct material, $15; direct labor, $27; variable overhead, $15; and applied fixed overhead, $32. Purple Tree has received a quote of $60 from a potential supplier for this part. If Purple Tree buys the part, 75 percent of the applied fixed overhead would continue. They need 12,000 units of the specialized part.  Purple Tree Company would be better off by Group of answer choices $60,000 to buy the part. $348,000 to buy the part. $30,000 to manufacture

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In its production process, Purple Tree Inc uses a specialized part in the manufacturing of their fancy widget.  The costs to make a part are: direct material, $15; direct labor, $27; variable overhead, $15; and applied fixed overhead, $32. Purple Tree has received a quote of $60 from a potential supplier for this part. If Purple Tree buys the part, 75 percent of the applied fixed overhead would continue. They need 12,000 units of the specialized part.  Purple Tree Company would be better off by

Group of answer choices
$60,000 to buy the part.
$348,000 to buy the part.
$30,000 to manufacture the part.
$216,000 to manufacture the part.
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