Max Company Uses 10,000 Units of Part a in Producing

question 53

Multiple Choice

Max Company uses 10,000 units of Part A in producing its products.A supplier offers to make Part A for $7.Max Company has relevant costs of $8 a unit to manufacture Part A.If there is excess capacity, the opportunity cost of buying Part A from the supplier is

• A)$0.
• B)$10,000.
• C)$70,000.
• D)$80,000.

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Definitions:

Estrogens

A class of hormones, including estradiol, that are more prevalent in females; they are associated with the development of the secondary and primary sex characteristics and with sexual behavior.

Androgens

A class of hormones, including testosterone, that are more prevalent in males; they are associated with the development of the secondary and primary sex characteristics and with sexual behavior.

Ovaries

The female gonads (sex glands); they release the sex hormones and produce the cells that females use for sexual reproduction, called eggs.

Testes

The male gonads (sex glands); they release the sex hormones and produce the cells that males use for sexual reproduction, called sperm.