Tex's Manufacturing Company Can Make 100 Units of a Necessary

question 121

Multiple Choice

Tex's Manufacturing Company can make 100 units of a necessary component part with the following costs: $$\begin{array} { l r } \text { Direct Materials } & \$ 120,000 \\\text { Direct Labor } & 25,000 \\\text { Variable Overhead } & 45,000 \\\text { Fixed Overhead } & 30,000\end{array}$$ If Tex's Manufacturing Company can purchase the component externally for $190,000 and only $5,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?

• A)Buy and save $5,000
• B)Make and save $5,000
• C)Make and save $15,000
• D)Buy and save $15,000

Acknowledge the impact of labor demand fluctuations on employment levels.

Recognize the role of government policies and actions in affecting unemployment rates.

Acknowledge how job search and matching processes contribute to frictional unemployment.

Understand the role of wages in determining labor market equilibrium and unemployment.

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