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Sutton Inc If Sutton Inc

question 211

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Sutton Inc. can produce 100 units of a component part with the following costs:  Direct Materials $130,000 Direct Labor 103,000 Variable Overhead 82,000 Fixed Overhead 62,000\begin{array} { l r } \text { Direct Materials } & \$ 130,000 \\\text { Direct Labor } & 103,000 \\\text { Variable Overhead } & 82,000 \\\text { Fixed Overhead } & 62,000\end{array} If Sutton Inc. can purchase the units externally for $300000 by what amount will its total costs change?


Definitions:

Quality Upgrade

A quality upgrade involves improving the standard and performance of a product, service, or process, striving for higher efficiency, reliability, and customer satisfaction.

Production Efficiencies

The optimization of resources and processes to maximize output while minimizing waste and costs in manufacturing.

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