Chapman Company Manufactures Widgets The Manufacturing Overhead Consists of $24000 of Costs That Will

question 165

Multiple Choice

Chapman Company manufactures widgets.Embree Company has approached Chapman with a proposal to sell the company widgets at a price of $125000 for 100000 units.Chapman is currently making these components in its own factory.The following costs are associated with this part of the process when 100000 units are produced: $$\begin{array} { l r } \text { Direct materials } & \$ 46,500 \\\text { Direct labor } & 43,500 \\\text { Manufacturing overhead } & 60,000 \\\text { Total } & \$ 150,000 \\\hline\end{array}$$ The manufacturing overhead consists of $24000 of costs that will be eliminated if the components are no longer produced by Chapman.From Chapman's point of view how much is the incremental cost or savings if the widgets are bought instead of made?

• A)$25000 incremental savings
• B)$11000 incremental cost
• C)$11000 incremental savings
• D)$25000 incremental cost

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Definitions:

H Zone

The region within a striated muscle fiber's sarcomere that contains only thick filaments and diminishes during muscle contraction.

Myosin Myofilaments

Filamentous proteins in muscle cells responsible for contraction by interacting with actin.

Actin Myofilaments

Protein filaments that, along with myosin, play a key role in the contraction of muscle cells by forming the thin filaments in the structure of muscle fibers.

Smooth Muscle

A type of muscle found in the walls of internal organs like the stomach and intestines, responsible for involuntary movements.