Pitkin Company Produces a Part Used in the Manufacture of One

question 55

Multiple Choice

Pitkin Company produces a part used in the manufacture of one of its products.The unit product cost of the part is $33,computed as follows: An outside supplier has offered to provide the annual requirement of 10,000 of the parts for only $27 each.The company estimates that 30% of the fixed manufacturing overhead costs above will continue if the parts are purchased from the outside supplier.Assume that direct labour is an avoidable cost in this decision.Based on these data,the per unit dollar advantage or disadvantage of purchasing the parts from the outside supplier would be:

• A) $1 disadvantage.
• B) $1 advantage.
• C) $3 advantage.
• D) $4 disadvantage.

---

Definitions:

Laying On Of Hands

A practice, often found in religious or healing contexts, where individuals place their hands on another person with the intention of transferring energy, comfort, or healing.

Medical History

A record of a patient's health information, including past illnesses, surgeries, and family disease history, used for medical decision-making.

Abdominal Pain

Discomfort or pain located anywhere between the chest and groin region, often indicating issues within the stomach, liver, pancreas, or intestines.

Elderly Person's Calories

The amount of energy, measured in calories, that is recommended for consumption by older adults to maintain their health.