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When am doing this and am getting A 4000units of W n 1000 units of Z while bpp is saying B I didn’t understand how are they getting 4000 units of Z plz explain
Two things
Firstly they can make 8,000 units in-house and your answer is only making 5,000 units.
More importantly, if they make 1,000 units of Z they will then incur all of the directly attributable fixed costs of $7,000 for Z, and you need to take these fixed costs into account as well when deciding what to buy externally.
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