Chafford, Inc

question 85

Multiple Choice

Chafford, Inc. currently manufactures 2,000 subcomponents in one of its factories. The unit costs to produce the subcomponents 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%

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Definitions:

Hypothalamus

An area in the brain that controls specific metabolic functions and autonomic nervous system tasks, such as regulating body temperature, appetite, and hydration levels.

Simon LeVay

A neuroscientist known for his research on brain structures and sexual orientation, particularly for his study on hypothalamic structures in homosexual and heterosexual men.

Do Your Best

A motivational encouragement to strive for the highest level of performance possible.

Productivity

The effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input.