Use the Following Data for the Next 2 Questions

question 118

Multiple Choice

Use the following data for the next 2 questions:
A manufacturer operating with excess capacity has been asked to fill a special order at $7.25 per unit. The regular price is $10 per unit. No other use of the currently idle capacity can be found. The manufacturer's usual variable costs per unit are $3.50 for direct materials, $2.00 for direct labor, $1.00 for variable overhead, and $0.50 for sales commission. No sales commission would be paid on this special order. The average fixed overhead cost per unit is $0.25.
-Which alternative is more profitable and by what amount?

• A) Buy, $150,000
• B) Make,$150,000
• C) Buy, $75,000
• D) Make, $75,000

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Definitions:

Interest Groups

Organizations or groups of individuals that advocate for specific causes or policies.

Task Force

A temporary group of people formed to solve a particular problem or carry out a specific assignment.

Functional Group

A team or department within an organization that performs a specific function or set of functions, such as marketing or finance.

Quality Control Circle

A group of workers who voluntarily meet to discuss and find solutions to workplace issues, particularly those affecting quality.