Wishnell Toys Can Make 5,000 Toy Robots with the Following

question 9

Multiple Choice

Wishnell Toys can make 5,000 toy robots with the following costs: The company can purchase the 5,000 robots externally for $145,000.The avoidable fixed costs are $15,000 if the units are purchased externally.What is the cost savings if the company makes the robots?

• A)$18,000
• B)$15,000
• C)$5,000
• D)$3,000

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Definitions:

Compensating Differential

Additional wage or benefit that compensates workers for unpleasant, risky, or demanding work conditions.

Economic Income

The total value of all income earned, including both monetary and non-monetary gains, over a period of time.

Transfer Payment

Payments made by the government to individuals or other organizations without expecting a good or service in return.

African-American Persons

Individuals of African descent living in the United States, often with a history linked to enslavement and civil rights struggles.