During 2016, It Cost Westa, Inc

question 25

Multiple Choice

During 2016, it cost Westa, Inc.$18 per unit to produce part T5.During 2017, it has increased to $21 per unit.In 2017, Southside Company has offered to provide Part T5 for $16 per unit to Westa.As it pertains to the make-or-buy decision, which statement is true?

• A)Differential costs are $5 per unit.
• B)Incremental costs are $2 per unit.
• C)Net relevant costs are $2 per unit.
• D)Incremental revenues are $3 per unit.

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Definitions:

Sum Of Squares

In statistics, the sum of squares is a measure used to quantify the variation or dispersion of a set of numbers.

Independent Variables

Variables in an experiment or model that are manipulated or classified by the researcher to observe their effect on the dependent variable.

Standardized Residual

The value obtained by dividing a residual by its standard deviation.

Studentized Deleted Residuals

Standardized residuals that are based on a revised standard error of the estimate obtained by deleting observation i from the data set and then performing the regression analysis and computations.