Jansung Company manufactures 5,000 telephones per year. The full manufacturing costs per telephone are as follows:
Telecom America has offered to sell Jansung Company 5,000 telephones for $20 per unit. If Jansung Company accepts the offer, $12,500 of fixed overhead will be eliminated.
Applying differential analysis to the situation, should Jansung Company make or buy the phones?

Question

Jansung Company manufactures 5,000 telephones per year. The full manufacturing costs per telephone are as follows:
  Telecom America has offered to sell Jansung Company 5,000 telephones for $20 per unit. If Jansung Company accepts the offer, $12,500 of fixed overhead will be eliminated.
Applying differential analysis to the situation, should Jansung Company make or buy the phones?

Quizplus · Accepted Answer

The Answer of Jansung Company manufactures 5,000 telephones per year. The full manufacturing costs per telephone are as follows:
  Telecom America has offered to sell Jansung Company 5,000 telephones for $20 per unit. If Jansung Company accepts the offer, $12,500 of fixed overhead will be eliminated.
Applying differential analysis to the situation, should Jansung Company make or buy the phones?

Jansung Company Manufactures 5,000 Telephones Per Year