Crigui Music Produces 60,000 CDs on Which to Record Music

question 92

Multiple Choice

Crigui Music produces 60,000 CDs on which to record music. The CDs have the following costs:. $$\begin{array} { l r } \text { Direct Materials } & \$ 13,000 \\\text { Direct Labor } & 15,000 \\\text { Variable Overhead } & 3,000 \\\text { Fixed Overhead } & 7,000\end{array}$$ None of Crigui's fixed overhead costs can be reduced, but another product could be made that would increase profit contribution by $4,000 if the CDs were acquired externally. If cost minimization is the major consideration and the company would prefer to buy the CDs, what is the maximum external price that Crigui would be willing to accept to acquire the 60,000 units externally?

• A) $38,000
• B) $34,000
• C) $35,000
• D) $42,000

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Definitions:

Falsifiable

A criterion for a theory or hypothesis, stating that it must be possible to refute it through observation or experiment.

Replicable

Capable of being recreated or reproduced under the same conditions, ensuring the reliability of scientific findings.

Convenience Sample

A type of nonprobability sampling where participants are selected based on their availability and willingness to take part, rather than at random.

Representative

Someone or something that serves as a typical example or an agent for others.