Ruth Company Produces 1,000 Units of a Necessary Component with the Following

question 66

Multiple Choice

Ruth Company produces 1,000 units of a necessary component with the following costs: None of Ruth Company's fixed overhead costs can be reduced, but another product could be made that would increase profit contribution by $8,000 if the components were acquired externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Ruth Company would be willing to accept to acquire the 1,000 units externally?

• A) $43,000
• B) $55,000
• C) $48,000
• D) $52,000

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Definitions:

Retention

The ability to remember and store information over time, often measured in terms of duration and capacity.

Period Of Time

A specific duration marked by a beginning and an end, measured in units such as seconds, minutes, hours, or years.

Constructive Processing

Referring to the retrieval of memories in which those memories are altered, revised, or influenced by newer information.

Hindsight Bias

The tendency to falsely believe, through revision of older memories to include newer information, that one could have correctly predicted the outcome of an event.