Use the Following Information to Answer the Questions Below

question 52

Multiple Choice

Use the following information to answer the questions below.
You currently make a part for old equipment at a cost of $20 / unit. The annual fixed cost for this equipment is $50,000. You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year (see table) .

-Refer to the instruction above. What are total costs to make a quantity of 40,000 units per year?

• A) $400,000
• B) $450,000
• C) $800,000
• D) $850,000

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Definitions:

Biconditional

A logical statement that is true only if both the conditions it connects are either true or false.

Tautology

A proposition that is inherently true due to its logical structure or necessity, frequently restating the same concept using varied terminology.

Main Component

The primary or most important part of something that contributes to its function or structure.

Conjunct

An element of a conjunction in logic, representing a compound statement formed with the word "and" that is true only when both components are true.