Fornelli, Inc If Fornelli, Inc

question 3

Multiple Choice

Fornelli, Inc. can produce 100 units of a component part with the following costs: $$\begin{array} { l r } \text { Direct Materials } & \$ 15,000 \\\text { Direct Labor } & 6,500 \\\text { Variable Overhead } & 16,000 \\\text { Fixed Overhead } & 11,000\end{array}$$ If Fornelli, Inc. can purchase the component part externally for $44,000 and only $4,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?

• A)Make and save $500
• B)Buy and save $500
• C)Make and save $2,500
• D)Buy and save $6,500

---

Definitions:

Braided River

A type of river characterized by a network of river channels separated by small, often temporary, islands known as eyots or aits.

Sedimentary Environments

Various geographical settings where sediment accumulation occurs, significantly influencing the formation and type of sedimentary rocks.

Vancouver

A coastal seaport city in western Canada, known for its vibrant culture and natural beauty.

Landslides

Landslides refer to the movement of soil, rock, and debris down a slope due to gravity, often triggered by rain, earthquakes, or human activity.