Use the Following Information for Questions
Hermantic, Inc -If Hermantic, Inc

question 17

Multiple Choice

Use the following information for questions
Hermantic, Inc.can produce 100 units of a component part with the following costs:
$$\begin{array} { l c } \text { Direct Materials } & \$ 30,000 \\\text { Direct Labour } & 13,000 \\\text { Variable Overhead } & 32,000 \\\text { Fixed Overhead } & \mathbf { 2 2 , 0 0 0 }\end{array}$$
-If Hermantic, Inc.can purchase the component externally for $88,000 and only $8,000 of the fixed costs can be avoided, what is the correct "make-or-buy decision"?

• A)Make and save $1,000.
• B)Buy and save $1,000.
• C)Make and save $5,000.
• D)Buy and save $13,000.

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Definitions:

Toll-free Numbers

Telephone numbers that allow callers to reach businesses or individuals without being charged for the call, often used for customer service or sales.

Lead

A prospective customer who has shown interest in a product or service, potentially leading to a sale.

Qualified Prospect

A potential customer who has been evaluated and deemed likely to purchase a product or service due to their interest, ability to buy, and authority to make the purchase decision.

Cold Call

The practice of contacting potential customers or clients who have not previously expressed interest in the offered products or services, typically via telephone.