A Supplier Offers to Make Part a for $30

question 208

Multiple Choice

A supplier offers to make Part A for $30. Altec Services Corporation has relevant costs of $47 a unit to manufacture 1,020 units of Part A. If there is excess capacity, the opportunity cost of buying Part A from the supplier is ________.

• A) $0
• B) $47,940
• C) $30,600
• D) $78,540

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Definitions:

Federal Budget

The government's estimate of revenue and spending for a fiscal year.

Urban Welfare Payments

Financial support provided by government programs to individuals and families in urban areas, aimed at helping them meet basic needs.

Budget Deficit

A financial situation where an entity's expenditures exceed its revenues over a specified period, prompting borrowing or use of saved reserves.

Continuing Resolution

A type of legislation that allows government agencies to continue operating at current funding levels until new budget legislation is passed.