Ahrends Corporation Makes 70,000 Units Per Year of a Part

question 145

Multiple Choice

Ahrends Corporation makes 70,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: An outside supplier has offered to sell the company all of these parts it needs for $48.50 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $273,000 per year.If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $8.20 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products.What is the financial advantage (disadvantage) of purchasing the part rather than making it? (Round your intermediate calculations to 2 decimal places.)

• A) $273,000
• B) ($126,000)
• C) $147,000
• D) $448,000

Describe the relationship between leadership and culture as explored in Project GLOBE.

Recognize the role of situational factors in determining effective leadership behavior.

Explain the significance of leadership behavior in influencing follower compliance and motivation.

Analyze the qualities and behaviors of empowering leaders.

---

Definitions:

Conscientiousness

A personality trait characterized by thoroughness, efficiency, and organization, often associated with high levels of responsibility and self-discipline.

CEO

Chief Executive Officer, the highest-ranking person in a company or organization, responsible for making major corporate decisions.

Top Management Team

A group of senior executives responsible for making the high-level strategic decisions within an organization, guiding its overall direction.

Factor Analysis

A statistical method used to identify underlying variables, or factors, that explain the pattern of correlations within a set of observed variables.