Sage Company Is Operating at 90% of Capacity and Is

question 54

Multiple Choice

Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $15 per unit. The unit cost for the business to make the part is $20, including fixed costs, and $11, not including fixed costs. If 30,000 units of the part are normally purchased during the year but could be manufactured using unused capacity, the amount of differential cost increase or decrease from making the part rather than purchasing it would be a

• A)$150,000 cost increase
• B)$120,000 cost decrease
• C)$150,000 cost decrease
• D)$120,000 cost increase

---

Definitions:

Central Sleep Apnea

Sleep disorder characterized by complete cessation of respiratory activity for brief periods of time (20 seconds or more); sufferers do not have frequent awakenings and do not tend to feel tired during the day; occurs when the brain does not send the signal to breathe to the respiratory system.

Respiratory System

The biological system consisting of specific organs and structures used for gas exchange in animals and plants.

Sleep Restriction Therapy

Sleep Restriction Therapy is a behavioral treatment for insomnia, involving limiting the amount of time spent in bed to increase sleep efficiency.

Psychodynamic Dream Analysis

A psychoanalytic approach to interpreting dreams, focusing on uncovering the unconscious content and significance of dreams.