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Business, 06.06.2020 16:59 mp515

Wisconsin Snowmobile Corp. is considering a switch to level production. Cost efficiencies would occur under level production, and aftertax costs would decline by $32,000, but inventory would increase by $400,000. Wisconsin Snowmobile would have to finance the extra inventory at a cost of 9.5 percent. a-1. Determine the extra cost or savings of switching over to level production.

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