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Garcia Company Produces a Part That Is Used in the Manufacture

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Garcia Company produces a part that is used in the manufacture of one of its products.The annual costs associated with the production of 5,000 units of this part are as follows: Garcia Company produces a part that is used in the manufacture of one of its products.The annual costs associated with the production of 5,000 units of this part are as follows:   Of the fixed factory overhead costs,$72,000 are avoidable.Another company has offered to sell 5,000 units of the same part to Garcia for $105.60 per unit.The facilities currently used to make the part can be rented out to another manufacturer for $72,000 per year.What should Garcia Company do? A) Make the part to save $48,000. B) Make the part to save $96,000. C) Buy the part to save $24,000. D) Buy the part to save $72,000. Of the fixed factory overhead costs,$72,000 are avoidable.Another company has offered to sell 5,000 units of the same part to Garcia for $105.60 per unit.The facilities currently used to make the part can be rented out to another manufacturer for $72,000 per year.What should Garcia Company do?


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Deposition

A deposition involves a live person being questioned under oath by an attorney who is party to the proceeding and takes place prior to the case going before the judge (and jury).

Under Oath

A legal condition whereby an individual promises to tell the truth in a court of law or other legal proceeding.

Attorney

A professional who is qualified to offer advice about the law or represent someone in legal matters.

Judge

An official appointed to interpret and apply the law, often presiding over a court.

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