Use the Following Information to Answer the Questions Below

question 21

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 does the company save for the year by selecting the low-cost option (for annual requirements of 40,000 units) ?

• A) $150,000
• B) $300,000
• C) $50,000
• D) $40,000

---

Definitions:

Attitude

A psychological tendency expressed by evaluating a particular entity with some degree of favor or disfavor.

Price

The amount of money required to purchase a good or service.

Alternative Energy Sources

refer to sources of energy that are considered alternatives to the most commonly used non-sustainable sources, such as fossil fuels, including wind, solar, and hydroelectric power.

Control Group

A group in an experiment that does not receive the experimental treatment, used as a benchmark to measure how the other tested subjects do.