Chafford,Inc

question 90

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%

Determine the average collection period to assess the effectiveness of credit policies.

Interpret inventory turnover to assess inventory management efficiency.

Calculate return on equity to evaluate financial performance.

Understand the significance of net profit margin and gross margin percentages in assessing profitability.

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