Gordon Corporation Produces 1,000 Units of a Part Per Year

question 376

Multiple Choice

Gordon Corporation produces 1,000 units of a part per year which are used in the assembly of one of its products. The unit cost of producing these parts is: The part can be purchased from an outside supplier at $20 per unit. If the part is purchased from the outside supplier, two thirds of the total fixed costs incurred in producing the part can be avoided. The annual financial advantage (disadvantage) for the company as a result of buying the part from the outside supplier would be:

• A) $3,000
• B) ($1,000)
• C) $7,000
• D) ($5,000)

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Definitions:

Desired Behaviour

The specific actions or reactions that an individual or organization aims to elicit from others, often through guidance, incentive, or training.

Positive Reinforcement

The process of encouraging or increasing a behavior by presenting a favorable outcome or reward upon the occurrence of the behavior.

Inventory Of Rewards

A catalog or list of rewards and incentives available within an organization, intended to motivate and acknowledge employee contributions.

Contingent Reinforcement

The provision of rewards or consequences based on the occurrence of a specific behavior, used as a strategy to increase or decrease that behavior.