Which item should I buy?

Derek is performing incremental analysis in a make-or-buy decision for Item X. If Derek buys Item X, he can u?

  • Derek is performing incremental analysis in a make-or-buy decision for Item X. If Derek buys Item X, he can use its released productive capacity to produce Item Z. Derek will sell Item Z for $12,000 and incur production costs of $8,000. Derek’s incremental analysis should include an opportunity cost of: a. $12,000. b. $8,000. c. $4,000. d. There is no opportunity cost in this decision.

  • Answer:

    e. Tell Derek to do his own homework

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e. Tell Derek to do his own homework

Henry

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