Tex's Manufacturing Company Can Make 100 Units of a Necessary

question 161

Multiple Choice

Tex's Manufacturing Company can make 100 units of a necessary component part with the following costs: $$\begin{array} { l r } \text { Direct Materials } & \$ 120,000 \\\text { Direct Labor } & 25,000 \\\text { Variable Overhead } & 45,000 \\\text { Fixed Overhead } & 30,000\end{array}$$ If Tex's Manufacturing Company can purchase the component externally for $190000 and only $5000 of the fixed costs can be avoided what is the correct make-or-buy decision?

• A)Buy and save $5000
• B)Make and save $5000
• C)Make and save $15000
• D)Buy and save $15000

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Definitions:

Bakery

A place where bread, pastries, cakes, and other baked goods are made or sold.

Gross Domestic Product

Measures the total value of all goods and services produced within a country’s borders over a specific time period, indicative of its economic health.

Sanitation

Measures aimed at promoting hygiene and preventing disease, especially through the provision of clean water and disposal of sewage and waste.

Mobiles

Portable electronic devices with connectivity capabilities, such as smartphones and tablets, used for communication and information access.