Supler Corporation Produces a Part Used in the Manufacture of One

question 63

Multiple Choice

Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $18, computed as follows: An outside supplier has offered to provide the annual requirement of 4,000 of the parts for only $14 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:

• A) ($1) per unit on average
• B) $1 per unit on average
• C) $2 per unit on average
• D) ($4) per unit on average

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Definitions:

Creative Immortality

The concept of achieving enduring recognition and memory through creative or intellectual contributions.

Heavenly Immortality

The concept of an eternal life of bliss, often associated with religious or spiritual beliefs about the afterlife.

Experiential Immortality

The belief or feeling that one's actions, influences, or work will continue to have an impact after one's death.

Automatic Process

Mental activities that require minimal conscious thought, are typically rapid and efficient, and often occur without deliberate control or attention.