Use the Following Information for Questions
Hermantic, Inc -If Hermantic, Inc

question 17

Multiple Choice

Use the following information for questions
Hermantic, Inc.can produce 100 units of a component part with the following costs:
$$\begin{array} { l c } \text { Direct Materials } & \$ 30,000 \\\text { Direct Labour } & 13,000 \\\text { Variable Overhead } & 32,000 \\\text { Fixed Overhead } & \mathbf { 2 2 , 0 0 0 }\end{array}$$
-If Hermantic, Inc.can purchase the component externally for $88,000 and only $8,000 of the fixed costs can be avoided, what is the correct "make-or-buy decision"?

• A)Make and save $1,000.
• B)Buy and save $1,000.
• C)Make and save $5,000.
• D)Buy and save $13,000.

---

Definitions:

Electronic Funds Transfer Act

A U.S. law that protects consumers engaging in electronic transfers, including ATM withdrawals, direct deposits, and transfers initiated through debit card transactions.

Regulatory Statute

Laws designed to govern and regulate specific activities or sectors, aiming to maintain public welfare, safety, and standards.

Unauthorized Transfers

Transactions or movements of assets that occur without the proper approval or consent.

UCC Article 4A

Governs the transfer of funds through electronic means between banks, establishing a legal framework for such transactions.