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Concordia University - COMM 305 Temple, Inc

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Concordia University - COMM 305
Temple, Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for Temple for $350 each. Temple needs 500 clocks annually. Temple has provided the following unit costs for its commercial clocks:

Direct materials                                               $ 70

Direct labour                                                          80

Variable overhead                                              75

Fixed overhead (30% avoidable)                120

Prepare an incremental analysis which shows the effect of the make or buy decision.