Explore BrainMass

Explore BrainMass

    Accounting: Buy or make analysis.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Jo Company makes and sells widgets using a component part presently produced in-house. 10,000 of the parts are needed each year, at a cost of $400,000, which includes allocated fixed costs of $100,000.
    A reputable outside vendor has offered to sell the parts to Jo for $32 per unit.

    What will be the effect (increase or decrease and amount) on Jo's operating income if the offer is accepted ?

    Please explain how you have arrived at your conclusion and show your work

    © BrainMass Inc. brainmass.com June 4, 2020, 1:44 am ad1c9bdddf
    https://brainmass.com/business/accounting/accounting-buy-make-analysis-417569

    Solution Preview

    The solution is presented in a Word document.

    The solution is clear and concise.

    Thank you.

    Jo Company makes and sells widgets using a component part presently produced ...

    Solution Summary

    The problem deals with determining whether to buy or make an item.

    $2.19

    ADVERTISEMENT