A Supplier of Components for the Automotive Industry Has the Opportunity

question 17

Multiple Choice

A supplier of components for the automotive industry has the opportunity to purchase a job lot of parts which it would normally manufacture. The purchase price is $80 000. The production costs for the same number of units are: Should the parts be purchased and why?

• A) Yes, because it saves $80 000.
• B) Yes, because it saves $20 000.
• C) No, because it costs $100 000.
• D) No, because it costs $20 000.

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