Chafford,Inc

question 17

Multiple Choice

Chafford,Inc.currently manufactures 2,000 subcomponents in one of its factories.The unit costs to produce the subcomponents are: The unit costs to produce are:
Due to a labor strike,Chafford is considering purchasing the subcomponents from an outside supplier for $250 per unit.The union is demanding a 20% increase in pay for direct labor.Fixed overhead is not avoidable.How much could Chafford increase their pay before it would be more advantageous to purchase the subcomponents from the outside supplier?

• A)5%
• B)15%
• C)50%
• D)75%

---

Definitions:

Discriminating

Making distinctions or choices based on existing biases or preferences, often unfairly.

Trade Union Membership

The state of being part of an organized group of workers who have joined together to achieve common goals such as better working conditions.

Coercing Employees

The act of compelling employees to act in a certain way through force or threats, often in a workplace context.

Illegal Strikes

Work stoppages or labor strikes conducted without following legal procedures or without formal approval from labor authorities or unions.