Olive Corp

question 41

Multiple Choice

Olive Corp. currently makes 20,000 subcomponents a year in one of its factories. The unit costs to produce are: An outside supplier has offered to provide Olive Corp with the 20,000 subcomponents at a $36 per unit price. Fixed overhead is not avoidable. If Olive Corp rejects the outside offer, what will be the effect on short-term profits?

• A) $80,000 increase
• B) no change
• C) $160,000 decrease
• D) $80,000 decrease

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Definitions:

Sustainable Value Chain

A value chain approach focusing on long term resilience and environmental sustainability, aiming to minimize negative impacts.

Fossil Fuels

Natural fuels such as coal, oil, and natural gas, formed from the remains of living organisms and serving as a major global energy source.

Resource Constraints

Limitations on the availability of resources such as time, money, and labor that can affect the completion of projects or the achievement of goals.

Rapid Deforestation

The fast-paced clearing or thinning of forests by humans, often for agriculture, logging, or urban development, leading to significant ecological and environmental impacts.