Credell Company Uses 12,000 Units of a Part in Its

question 43

Multiple Choice

Credell Company uses 12,000 units of a part in its production process.The costs to make a part are: direct material,$15; direct labor,$27; variable overhead,$15; and applied fixed overhead,$32.Anderson has received a quote of $60 from a potential supplier for this part.If Credell buys the part,75 percent of the applied fixed overhead would continue.Credell Company would be better off by

• A)$30,000 to manufacture the part.
• B)$348,000 to buy the part.
• C)$60,000 to buy the part.
• D)$216,000 to manufacture the part.

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Definitions:

Exogenous DNA

DNA that originates outside an organism and can be introduced through viruses, horizontal gene transfer, or genetic engineering.

Spiracles

Small openings on the surface of some animals, especially insects, used for breathing.

Oxygen

A chemical element with the symbol O and atomic number 8, essential for most life forms on Earth as it is a key component of the respiratory processes of most living cells.

Insects

Small, arthropod animals characterized by having a segmented body, six legs, and generally one or two pairs of wings.