Jensen Corporation produces a part for use in the production of one of its products. The per-unit costs associated with the annual production of 1,000 units of this part are as follows:Direct materialsDirect laborVariable factory overheadFixed factory overheadTotal costs$5.25$12.00$2.75$6.00$26.00$2,500 of the fixed factory overhead costs associated with the production of this product are common fixed costs.Wells Company has offered to sell 1,000 units of the same part to Jensen Corporation for $21 per unit. Jensen should:Select one:Oa. Buy the part, because this would save the company $5.00 per unit.Ob. Make the part, because this would save the company $1.00 per unit.Oc. Make the part, because this would save the company $2,500 annually.Od. Buy the part, because this would save the company $2,500 annually.

Name: Jensen Corporation produces a part for use in the production of one o
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Description: Jensen Corporation produces a part for use in the production of one of its products. The per-unit costs associated with the annual production of 1,000 units of this part are as follows:Direct materialsDirect laborVariable factory overheadFixed facto

The variable cost per unit remains constant at every level of production. The fixed costs in total…

Business

Accounting

ensen Corporation produces a part for use in the production of one of its products. The per-unit costs associated with the annual production of 1,000 units of this part are as follows Direct materials $5.25 $12.00 Direct labor "ariable factory overhead $2.75 ixed factory overhead $6.00 otal costs $26.00 2,500 of the fixed factory overhead costs associated with the production of this product are common fixed costs. ells Company has offered to sell 1,000 units of the same part to Jensen Corporation for $21 per unit. Jensen should: lect one: ) a. Buy the part, because this would save the company $5.00 per unit. ) b. Make the part, because this would save the company $1.00 per unit. c. Make the part, because this would save the company $2,500 annually. d. Buy the part, because this would save the company $2,500 annually.

ensen Corporation produces a part for use in the production of one of its products. The per-unit costs associated with the annual production of 1,000 units of this part are as follows Direct materials $5.25 $12.00 Direct labor "ariable factory overhead $2.75 ixed factory overhead $6.00 otal costs $26.00 2,500 of the fixed factory overhead costs associated with the production of this product are common fixed costs. ells Company has offered to sell 1,000 units of the same part to Jensen Corporation for $21 per unit. Jensen should: lect one: ) a. Buy the part, because this would save the company $5.00 per unit. ) b. Make the part, because this would save the company $1.00 per unit. c. Make the part, because this would save the company $2,500 annually. d. Buy the part, because this would save the company $2,500 annually.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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