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

question 10

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.At what price would CJP be indifferent to XYZ's offer?

• A)$17.00
• B)$17.50
• C)$18.50
• D)$19.50

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Definitions:

Depressants

Substances that reduce the functioning of the nervous system, often leading to relaxation or sedation.

Amphetamines

Stimulant drugs that are manufactured in the laboratory.

Behavioral Effects

Changes in an individual's actions or behaviors that result from external or internal stimuli, including drugs, environment, or psychological conditions.

Emotional Effects

The impact on an individual's feelings and emotional state due to various external or internal factors.