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A company that sells agricultural products would emphasize a target-costing approach to pricing its products. a) False b) True JBC, Inc. produces 10,000 binders each
A company that sells agricultural products would emphasize a target-costing approach to pricing its products. a) False b) True JBC, Inc. produces 10,000 binders each year. Each binder has a variable cost of $12. Total fixed costs are $80,000 per year. The binders can be purchased from an outside supplier for $14 each. All fixed costs are unavoidable. If the binders are outsourced, what is the impact on the company's operating income? a) Operating income will decrease by $40,000 b) Operating income will increase by $40,000 c) Operating income will decrease by $20,000 d) Operating income will increase by $20,000
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