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Figure 9-2
Vest Industries Manufactures 40,000 Components Per Year An Outside Supplier Has Offered to Sell the Component for Manufacturing

question 46

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Figure 9-2
Vest Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined as follows:  Direct materials £75,000 Direct labour 120,000 Variable manufacturing overhead 45,000 Fixed manufacturing overhead 60,000 Total £300,000\begin{array}{lr}\text { Direct materials } & £ 75,000 \\\text { Direct labour } & 120,000 \\\text { Variable manufacturing overhead } & 45,000 \\\text { Fixed manufacturing overhead } & 60,000 \\\text { Total } & £ 300,000\end{array} An outside supplier has offered to sell the component for £12.75.
-Refer to Figure 9-2. What is the effect on income if Vest purchases the component from the outside supplier?


Definitions:

Organizational Socialization

The process by which new employees learn the values, norms, and expected behaviors of an organization.

Social Relationships

Connections between individuals that are formed through communication and mutual engagement, influencing behavior and social identities.

Developing Skills

The process of acquiring new, or improving existing, abilities or knowledge to enhance performance.

Diversity Management

The strategic approach to managing a diverse workforce in a way that fosters inclusion, respect, and productivity.

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