Junior Company Currently Buys 30,000 Units of a Part Used

question 70

Essay

Junior Company currently buys 30,000 units of a part used to manufacture its product at $40 per unit.Recently the supplier informed Junior Company that a 20 percent increase will take effect next year.Junior has some additional space and could produce the units for the following per-unit costs (based on 30,000 units):
If the units are purchased from the supplier, $200,000 of fixed costs will continue to be incurred.In addition, the plant can be rented out for $20,000 per year if the parts are purchased externally.
Required:
Should Junior Company buy the part externally or make it internally?

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Definitions:

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1996 law that barred gay couples from receiving federal benefits. Ruled unconstitutional in 2013.

Unconstitutional

Actions or laws that go against the principles or framework established by a country's constitution.

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The process of counting votes again, usually in circumstances where the results are disputed or the margin of victory is very small.