Exhibit 22-3 Shasta Company Is Operating at Less Than Full

question 54

Multiple Choice

Exhibit 22-3 Shasta Company is operating at less than full capacity. The production manager is considering using this excess capacity to make a part that he usually buys. The full costs of manufacturing the part are as follows:
Up to now, the company has been buying 2,000 units of the part for a total of $124,000.
Refer to Exhibit 22-3. In deciding whether or not to make the part, Shasta Company should use a differential unit cost figure of:

• A) $46
• B) $58
• C) $64
• D) $76

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Definitions:

Organization Succeed

The achievement of desired goals and objectives by an organization through effective planning, execution, and management of resources.

Not Being Prepared

The state of lacking the necessary readiness, resources, or information required for a particular task or situation.

Dressed Appropriately

Wearing attire that is suitable for a particular event, occasion, or environment.

Answering Calls

The act of responding to telephone calls, often in a customer service or professional office setting.