Reagan Company Manufactures a Part for Its Production Cycle The Fixed Factory Overhead Costs Are Unavoidable

question 49

Multiple Choice

Reagan Company manufactures a part for its production cycle. The costs per unit for 10,000 units of this part are as follows: $\begin{array}{ll}\text { Direct materials } & \$ 20 \\\text { Direct labor } & 15 \\\text { Variable factory overhead } & 16 \\\text { Fixed factory overhead } & \underline{10} \\\text { Total costs } & \$ 61\end{array}$ The fixed factory overhead costs are unavoidable. Assuming no other use of their facilities, the highest price that Reagan Company should be willing to pay for the part is:

• A) $35
• B) $45
• C) $51
• D) $41

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Definitions:

Tuberculosis

A bacterial infection primarily affecting the lungs and causing long-term cough, fever, and weight loss.

Chronic Bronchitis

A long-term inflammation of the bronchi in the lungs, characterized by coughing and difficulty breathing.

Nodular Lesions

Small, rounded masses or lumps of abnormal tissue, often found in organs or the skin, which can be benign or malignant.

Pulmonary Fibrosis

A lung disease that occurs when lung tissue becomes damaged and scarred, causing severe breathing difficulties and reduced oxygen supply to the bloodstream.