Cotton Corp

question 58

Multiple Choice

Cotton Corp. currently makes 10,000 subcomponents a year in one of its factories. The unit costs to produce are: An outside supplier has offered to provide Cotton Corp with the 10,000 subcomponents at a $84.50 per unit price. Fixed overhead is not avoidable. If Cotton Corp accepts the outside offer, what will be the effect on short-term profits?

• A) $260,000 increase
• B) $195,000 decrease
• C) no change
• D) $65,000 increase

---

Definitions:

Massive Shaped Stone

Large stones that have been shaped and used in the construction of ancient structures and monuments, showcasing sophisticated engineering techniques.

Volcanic Rock

Rock formed from magma erupted from a volcano or solidified lava on the earth's surface.

Continent

One of the very large landmasses on Earth, generally identified by convention rather than any strict criteria, with seven commonly recognized: Africa, Antarctica, Asia, Europe, North America, Australia (Oceania), and South America.

Fortress Town

A type of town designed and built with defensive structures such as walls, ramparts, and moats, to protect its inhabitants from enemy attacks.