Figure 13-2

question 50

Multiple Choice

Figure 13-2. ColorPro uses part 87A in the production of color printers.Unit manufacturing costs for part 87A are:
ColorPro uses 100,000 units of 87A per year.Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12.Fixed overhead is unavoidable.
Refer to Figure 13-2.Should ColorPro make or buy the part?

• A)Make the part because it will save $100,000 over buying it
• B)Buy the part because it will save $100,000 over making it
• C)Make the part because it will save $1,100,000 over buying it
• D)Buy the part because it will save 1,100,000 over making it
• E)Buy the part because it will save $300,000 over making it

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Definitions:

Thrift Institutions

Financial organizations focused on savings and mortgage lending, including savings and loan associations, credit unions, and savings banks.

Commercial Banks

Financial institutions that offer a wide range of services including deposit accounts, loans, and other financial products to businesses and consumers.

Contractionary Monetary Policy

To fight inflation, the Federal Reserve decreases the money supply.

Balance of Trade

This is the difference between the value of a country's exports and the value of its imports over a certain period, reflecting a trade surplus or deficit.