KI Corporation produces 10,000 units of K101 each week for use in the assembly of its finished… 1 answer below »
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KI Corporation produces 10,000 units of K101 each week for use in the assembly of its finished products. The unit cost of K101 is based on a production level of 1,000 units per week as follows:
Variable cost per unit: $45
Fixed cost per unit: $20
K01 also can be purchased from an outside supplier at $50 per unit. If K101 is purchased from the outside supplier, 30% of KI's fixed production costs can be eliminated. If KI purchases K101 from the outside supplier, then KI, operating income will?
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