Alba Motors Company has offered to sell 6,000 units of the same part to Transformation for $17.50 per unit. Assuming the company has no other use for its facilities and that the fixed manufacturing costs are unavoidable, what should Transformation do?
Transformation Motor Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 6,000 units, are as follows:
Produce in-house
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