The Cost to Produce Part a Was $5 Per Unit

question 56

Multiple Choice

The cost to produce Part A was $5 per unit in 2011.During 2012, it has increased to $8 per unit.In 2012, 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:

Plato

An ancient Greek philosopher who founded the Academy in Athens and contributed significantly to Western philosophy and metaphysics.

Cognitive Psychology

The branch of psychology focused on understanding mental processes such as perception, memory, thought, and problem solving.

Everyday Cognition

Cognitive processes and abilities that individuals use in daily life, encompassing decision making, problem-solving, and memory.

Cognitive Processes

Mental activities and operations that involve the acquisition, storage, manipulation, and retrieval of information.