Assume That Factory Space Freed Up by Purchasing the Part

question 71

Multiple Choice

Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can be sold for $2,000 profit. If Andrew Corporation makes the part, what will its operating income be?

• A) $1,000 less than if the company bought the part
• B) $5,000 greater than if the company bought the part
• C) $1,000 greater than if the company bought the part
• D) $2,000 greater than if the company bought the part

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