Doro Fill Company Fabricates Automobiles A Factory in Indonesia Has Offered to Supply Doro Fill

question 16

True/False

Doro Fill Company fabricates automobiles.Each auto includes one wiring harness,which is currently made in-house.Details of the harness fabrication are as follows:
$$\begin{array} { | l | l | l | } \hline \text { Volume } & 800 & \text { units per month } \\\hline \text { Variable cost per unit } & \$ 6 & \text { per unit } \\\hline \text { Fixed costs } & \$ 15,000 & \text { per month } \\\hline\end{array}$$ A factory in Indonesia has offered to supply Doro Fill with ready-made units for a cost of $11 each.Assume that Doro Fill's fixed costs are unavoidable and that the company will not be able to use the excess capacity in any profitable manner.In order to maximize operating income,Doro Fill should not outsource.

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Definitions:

Classical Conditioning

The method by which repeated association of two stimuli results in a response that was initially elicited by the second stimulus being elicited by the first stimulus over time.

Neutral Stimulus

An initially neutral stimulus that doesn't trigger a specific reaction besides drawing attention, until it becomes linked with an unconditioned stimulus.

Conditioned Stimulus

An initially neutral cue that, upon repeated pairing with an unconditioned stimulus, produces a conditioned reaction.

Positive Reinforcement

A process in operant conditioning where introducing a rewarding stimulus following a desired behavior increases the likelihood of that behavior being repeated.