Use the Following Information for Questions
Ortiz Co If Ortiz Buys the Part from an Outside Supplier, $40,000

question 32

Multiple Choice

Use the following information for questions
Ortiz Co. produces 5,000 units of part A12E. The following costs were incurred for that level of production: $$\begin{array} { l r } \text { Direct materials } & \$ 55,000 \\\text { Direct labor } & 160,000 \\\text { Variable overhead } & 75,000 \\\text { Fixed overhead } & 175,000\end{array}$$ If Ortiz buys the part from an outside supplier, $40,000 of the fixed overhead is avoidable.
-If the outside supplier offers a unit price of $68, net income will increase (decrease) by

• A) $(10,000).
• B) $125,000.
• C) $(50,000).
• D) $85,000.

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Definitions:

Cognitive Affective Processing Systems

A model explaining individual's thoughts and emotions interact and how they impact behavior.

Personality

A mix of properties or features that define a person's individual nature.

Walter Mischel

A psychologist known for his work on personality theory and cognitive-affective models, including the concept of self-control as demonstrated in the Marshmallow Test.

Sigmund Freud

An Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.