Mighty Safe Fire Alarm Is Currently Buying 50,000 Motherboards from MotherBoard,Inc.at

question 171

Multiple Choice

Mighty Safe Fire Alarm is currently buying 50,000 motherboards from MotherBoard,Inc.at a price of $65 per board.Mighty Safe is considering making its own boards.The costs to make the board are as follows: direct materials,$32 per unit; direct labor,$10 per unit; and variable factory overhead,$16.00 per unit.Fixed costs for the plant would increase by $75,000.Which option should be selected and why?

• A) buy,$75,000 more in profits
• B) make,$275,000 increase in profits
• C) buy,$275,000 more in profits
• D) make,$350,000 increase in profits

---

Definitions:

Informative Letter

A written communication designed to convey detailed information about a specific topic or issue.

Legal Matter

Refers to any situation or issue that involves legal principles or laws that need to be resolved.

Attorney at Law

A person licensed to practice law in a particular jurisdiction, offering legal advice, representation, and other services.

J.D.

Juris Doctor, a graduate-level professional degree in law.