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Jobart Company is currently operating at full capacity. It is considering buying a part from an outside supplier rather than making it in-house. If Jobart
Jobart Company is currently operating at full capacity. It is considering buying a part from an outside supplier rather than making it in-house. If Jobart purchases the part, it can use the released productive capacity to generate additional income of $30,000 from producing a different product. When conducting incremental analysis in this make-or-buy decision, the company should: (a)ignore the $30,000. (b)add $30,000 to other costs in the Make column. (c)add $30,000 to other costs in the Buy column. (d)subtract $30,000 from the other costs in the Make column. -- Walton, Inc. makes an unassembled product that it currently sells for $55. Production costs are $20. Walton is considering assembling the product and selling it for $68. The cost to assemble the product is estimated at $12. What decision should Walton make? (a)Sell before assembly; net income per unit will be $12 greater. (b)Sell before assembly; net income per unit will be $1 greater. (c)Process further; net income per unit will be $13 greater. (d)Process further; net income per unit will be $1 greater
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