McMurphy Corporation Produces a Part That Is Used in the Manufacture

question 200

Multiple Choice

McMurphy Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 12,000 units of this part are as follows:

Of the fixed factory overhead costs, $55,000 is avoidable. Conners Company has offered to sell 12,000 units of the same part to McMurphy Corporation for $41 per unit.
Assuming there is no other use for the facilities, Schmidt should ________.

• A) make the part, as this would save $16 per unit
• B) buy the part, as this would save $16 per unit
• C) buy the part, as this would save the company $192,000
• D) make the part, as this would save $14 per unit

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Black Churches

Churches within the African-American community that have historically served as centers for spiritual guidance, social support, and civil rights activism.

Civil Rights Movement

A social and political movement primarily during the 1950s and 1960s in the United States, aimed at ending racial discrimination and securing legal rights for African Americans.

Breeding Ground

An environment that facilitates or fosters the growth or development of certain traits or entities.

Social Integration

The process by which individuals or groups are incorporated into the social structure, becoming integrated into the values, norms, and practices of society.