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What circumstances is reasonable to purchase from supplier

Response to the following questions:

1. A company accepts incremental business at a special price that exceeds the variable cost. What other issues must the company consider in deciding whether to accept the business?

2. A company fabricates a component at a cost of $7.75. A supplier offers to supply the same component for $6.15. Under what circumstances is it reasonable to purchase from the supplier?

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Cost Accounting: What circumstances is reasonable to purchase from supplier

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