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Exhibit 22-2 JD Smith Company Is Operating at Less Than

Question 74

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Exhibit 22-2 JD Smith Company is operating at less than full capacity. The production manager is considering using this excess capacity to make a part that he usually buys. The full costs of manufacturing the part are as follows:
Exhibit 22-2 JD Smith Company is operating at less than full capacity. The production manager is considering using this excess capacity to make a part that he usually buys. The full costs of manufacturing the part are as follows: Up to now, the company has been buying 3,000 units of the part for a total of $115,000. Refer to Exhibit 22-2. If JD Smith uses a differential-cost analysis in deciding whether to make the part or buy the part, the total differential cost of making the part would be: A) $99,000 B) $114,000 C) $120,000 D) $138,000 Up to now, the company has been buying 3,000 units of the part for a total of $115,000.
Refer to Exhibit 22-2. If JD Smith uses a differential-cost analysis in deciding whether to make the part or buy the part, the total differential cost of making the part would be:


A) $99,000
B) $114,000
C) $120,000
D) $138,000

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