Fornelli, Inc

question 130

Multiple Choice

Fornelli, Inc. can produce 100 units of a component part with the following costs: If Fornelli, Inc. can purchase the component part 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

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