Fornelli, Inc If Fornelli, Inc

question 142

Multiple Choice

Fornelli, Inc. can produce 100 units of a component part with the following costs: $$\begin{array} { l r } \text { Direct Materials } & \$ 15,000 \\\text { Direct Labor } & 6,500 \\\text { Variable Overhead } & 16,000 \\\text { Fixed Overhead } & 11,000\end{array}$$ If Fornelli, Inc. can purchase the component part externally for $44,000 and only $4,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?

• A) Make and save $500
• B) Buy and save $500
• C) Make and save $2,500
• D) Buy and save $6,500

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Definitions:

Component Statements

The individual assertions or propositions that make up a more complex argument or logical structure.

Connective(s)

In logic, connectives are symbols that connect two statements or propositions to form a more complex proposition, such as "and", "or", "if...then", and "if and only if".

Symbolic Form

The representation of logical propositions using symbols to simplify notation and facilitate logical analysis.

Rotating

The act of turning around a central point or axis.