The CJP Company Produces 10,000 Units of Item S10 Annually

question 86

Multiple Choice

The CJP Company produces 10,000 units of item S10 annually at a total cost of $190,000. The XYZ Company has offered to supply 10,000 units of S10 per year for $18 per unit.If CJP accepts the offer,$4 per unit of the fixed overhead would be saved.In addition,some of CJP's facilities could be rented to a third party for $15,000 per year.What are the relevant costs for the "make" alternative?

• A)$160,000
• B)$165,000
• C)$175,000
• D)$185,000

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Definitions:

Peripheralization

The process of marginalizing a group or area, often economically or socially, making them peripheral or less central to the main focus of activity.

Industrialization

denotes the process of transforming economies from primarily agricultural to predominantly manufacturing and industrial in nature.

Primary Forces

Fundamental or principal forces driving changes or developments in various fields, such as technology, society, or economics.

Development of Cities

The process by which towns and cities are formed and become larger as more and more people begin living and working in central areas.