Exhibit 22-2 JD Smith Company Is Operating at Less Than

question 74

Multiple Choice

Exhibit 22-2 JD Smith Company is operating at less than full capacity. The production manager is considering using this excess capacity to make a part that he usually buys. The full costs of manufacturing the part are as follows:
Up to now, the company has been buying 3,000 units of the part for a total of $115,000.
Refer to Exhibit 22-2. If JD Smith uses a differential-cost analysis in deciding whether to make the part or buy the part, the total differential cost of making the part would be:

• A) $99,000
• B) $114,000
• C) $120,000
• D) $138,000

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Definitions:

More Equal

A phrase describing a reduction in disparities or inequalities, typically in contexts related to income, wealth, or opportunities.

Wealth Distribution

The manner in which wealth is distributed among the individuals in a society.

Income Inequality

Income inequality describes the extent to which income is distributed unevenly among a population.

Unequally Distributed

Refers to an unequal allocation or distribution of resources, wealth, or opportunities among different individuals or groups.