Lawson Company Produces a Part That Has the Following Costs

question 15

Multiple Choice

Lawson Company produces a part that has the following costs per unit: Crest Corporation can provide the part to Lawson for $19 per unit.Lawson Company has determined that 60 percent of its fixed overhead would continue if it purchased the part.However,if Lawson no longer produces the part,it can rent that portion of the plant facilities for $60,000 per year.Lawson Company currently produces 10,000 parts per year.Which alternative is preferable and by what margin?

• A)Make-$20,000
• B)Make-$50,000
• C)Buy-$10,000
• D)Buy-$40,000

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Definitions:

Independent Blogs

Personal or group blogs not affiliated with larger media companies, often focusing on niche topics and can offer unique, subjective viewpoints on various subjects.

Private Label Brands

Brands owned by a retailer or supplier that is only sold in their own stores, offering an alternative to national brands.

Generic Brands

Products that are marketed without a branded name, often as a lower-cost alternative to named brands.

Co-brands

Co-brands are collaborations between two or more brands to create a product or service that leverages the strengths and market appeal of each brand involved in the partnership.