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Part P40 is a part used in the production of air conditioners at Jackson Corporation. The following costs and data relate to the production of
Part P40 is a part used in the production of air conditioners at Jackson Corporation. The following costs and data relate to the production of Part P40: Number of parts produced annually 22,000 Fixed costs $43,000 Variable costs $67,000 Total cost to produce $110,000 Jackson Corporation can purchase the part from an outside supplier for $4.42 per unit. If they purchase from the outside supplier, 50% of the fixed costs would be avoided. If Jackson Corporation makes the part, how much will its operating income be? O A. $8,740 greater than if the company bought the part O B. $118,740 greater than if the company bought the part O c. $21,500 greater than if the company bought the part OD. $51,740 greater than if the company bought the part
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