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Refer to Rudder Company

Question 77

Essay

Refer to Rudder Company.
Required:
A. Based on the cost figures, if Rudder purchases metallic ink from the outside supplier, will operating income be higher or lower, and by how much?
B. What is the highest price per millilitre that Rudder would pay an outside supplier for the ink?

Correct Answer:

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A. $15,750 lower = [$1.24 - ($0.40 + 0.1...

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