Frederick Co

question 44

Multiple Choice

Frederick Co.is thinking about having one of its products manufactured by a subcontractor. Currently,the cost of manufacturing 5,000 units follows: If Frederick can buy 5,000 units from a subcontractor for $130,000,it should:

• A)Make the product because current factory overhead is less than $130,000.
• B)Make the product because the cost of direct material plus direct labor of manufacturing is less than $130,000.
• C)Make the product because factory overhead is a sunk cost.
• D)Buy the product because total fixed and variable manufacturing costs are greater than $130,000.
• E)Buy the product because the total incremental costs of manufacturing are greater than $130,000.

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Definitions:

Feeling

A subjective experience of emotions, reflecting a personal perception of emotions that can vary widely between individuals and situations.

Scapegoat

An individual or group blamed for wrongdoings, mistakes, or faults of others, often as a means of deflecting attention or responsibility.

Victim

A person harmed, injured, or killed as a result of a crime, accident, or other event or action.

Pariah

An individual who is despised or avoided by others; an outcast.