Copter Company Currently Produces a Key Part at a Total

question 116

Multiple Choice

Copter Company currently produces a key part at a total cost of $210,000.Variable costs are $170,000.Of the fixed cost, $10,000 relate specifically to this part.The remaining fixed costs are unavoidable. Another manufacturer has offered to supply the part for $190,000.The facilities currently used to manufacture the part could be used to manufacture a new product with an expected contribution margin of $30,000.Alternately, the facilities could be rented out at $60,000.Given all of these alternatives, _____ is Copter's lowest net cost for the part.

• A)$170,000
• B)$180,000
• C)$190,000
• D)$130,000

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Definitions:

Historical Project

An endeavor or research activity that seeks to uncover, interpret, or preserve past events and their significance.

Consumerism

The societal trend that emphasizes the acquisition of goods and services in ever-greater amounts, often associated with a way of life that values consumption.

Communism

Is a social and economic system in which property is owned by public bodies; government planning, not the market, determines production and distribution.

German Nazism

A totalitarian ideology and movement led by Adolf Hitler and the National Socialist German Workers' Party, emphasizing nationalism, racism, and the leadership principle, and leading to World War II and the Holocaust.