Cruise Company Produces a Part That Is Used in the Manufacture

question 70

Multiple Choice

Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 6,000 units, are as follows:
Suri Company has offered to sell 6,000 units of the same part to Cruise Company for $14 per unit. Assuming the company has no other use for its facilities, what should Cruise Company do?

• A)Make the part and save $3 per unit.
• B)Make the part and save $6 per unit.
• C)Buy from Suri and save $2 per unit.
• D)Make the part and save $10 per unit.

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Definitions:

Quantities X and Y

Refers to variables or values that are often used in mathematical equations or statistical models to represent data, measurements, or unknowns.

Association

A relationship or connection between two or more variables, where changes in one may be related to changes in the others.

Scatterplot

A type of graph used in statistics to visually display and compare two or more sets of related data.

Upward Curvature

A geometric shape or line that curves or bends upwards, often used to describe graphs, paths, or surfaces.