(Solved):Jain Simmons Company needs 10,000 units of a certain part to be used in production. If Jain…

 

Question

Jain Simmons Company needs 10,000 units of a certain part to be used in production. If Jain Simmons buys the part from Sullivan Company instead of making it themselves, Jain Simmons could not use the present facilities for another manufacturing activity. Sixty per cent of the fixed overhead applied will continue regardless of what decision is made. The following quantitative information is available regarding the situation presented:

Cost

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