The XYZ Company has offered to supply 10,000 units of $10 per year for $18 per unit. If CJP accepts the offer, $4 per unit of the fixed overhead would be saved. In addition, some of CJP's facilities could be rented to a third party for $15,000 per year. What are the relevant costs for the make alternative? A. $160,000 B. $165,000 C. $175,000 D. $185,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
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The xyz company has offered to supply 10000 solve general accounting question

The XYZ Company has offered to supply 10,000 units of $10 per year
for $18 per unit. If CJP accepts the offer, $4 per unit of the fixed
overhead would be saved. In addition, some of CJP's facilities could be
rented to a third party for $15,000 per year. What are the relevant costs
for the make alternative?
A. $160,000
B. $165,000
C. $175,000
D. $185,000
Transcribed Image Text:The XYZ Company has offered to supply 10,000 units of $10 per year for $18 per unit. If CJP accepts the offer, $4 per unit of the fixed overhead would be saved. In addition, some of CJP's facilities could be rented to a third party for $15,000 per year. What are the relevant costs for the make alternative? A. $160,000 B. $165,000 C. $175,000 D. $185,000
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