Sunday, September 11, 2011

Jensen Company has relevant costs of $80 per unit to manufacture Part A

ACCOUNTING

Multiple Choice

Jensen Company has relevant costs of $80 per unit to manufacture Part A. A current supplier offers to make Part A for $70 per unit. If capacity is constrained, the opportunity cost of buying Part A from the supplier

a. is zero.

b. is $10,000.

c. is $70,000.

d. cannot be determined using the above information.


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