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JAG Company sells decorative materials for homes. The decorative lamp division produces and sells 3000 lamps Variable cost is $140000 and foxed cost is $40000.

JAG Company sells decorative materials for homes. The decorative lamp division produces and sells 3000 lamps Variable cost is $140000 and foxed cost is $40000. The managers think about purchasing the lamp from another company at $58. One-fifth of the fixed cost will not be eliminated however managers will have the opportunity to use existing capacity to produce another product and earn $18000. Should J&G Company continue to produce the lamps or buy from outside? Make an incremental analysis to support your decision

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