Three Point Company Currently Produces 10,000 Units of a Key

question 1

Multiple Choice

Three Point Company currently produces 10,000 units of a key part at a total cost of $512,000. Variable costs are $300,000. Of the fixed cost, $140,000 relate specifically to this part. The remaining fixed costs are unavoidable. Another manufacturer has offered to supply the part for $48 per unit. The facilities currently used to manufacture the part could be used to manufacture a new product with an expected contribution margin of $55,000. Alternately, the facilities could be rented out at $63,000. is the opportunity cost to Three Point Company to make the part:

• A) $480,000
• B) $63,000
• C) $55,000
• D) None of these answers is correct.

---

Definitions:

Hormone Function

The role hormones play in regulating various physiological processes including growth, metabolism, reproduction, and mood regulation.

Neocortex

The part of the brain involved in higher-order brain functions such as sensory perception, cognition, generation of motor commands, spatial reasoning, and language.

Allocortex

A type of cortical tissue in the brain with fewer layers than the neocortex, involved in functions such as olfaction and emotion.

Perceptual World

The perceptual world refers to an individual's subjective interpretation and understanding of the external environment through sensory input.