The Cost to Produce Part a Was $5 Per Unit

question 66

Multiple Choice

The cost to produce Part A was $5 per unit in 2019.During 2020, it has increased to $8 per unit.In 2020, Supplier Company has offered to supply Part A for $6 per unit.For the make-or-buy decision,

• A)incremental revenues are $1 per unit.
• B)incremental costs are $3 per unit.
• C)net relevant costs are $3 per unit.
• D)differential costs are $2 per unit.

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Definitions:

Communication Skills

the ability to convey or share ideas and feelings effectively through verbal and non-verbal methods.

Critical Thinking Skills

The ability to engage in reflective and independent thinking, enabling the comprehensive analysis and evaluation of an argument or idea.

Empathy

The ability to understand and share the feelings of another person.

Continuing Education

Educational programs aimed at adults who are looking to gain new skills, knowledge, or qualifications beyond their initial form of education.