A Company Owns Equipment That Is Used to Manufacture Important

question 37

Multiple Choice

A company owns equipment that is used to manufacture important parts for its production process. Because the equipment is repeatedly breaking down, the company plans to sell the equipment for $10,000 and select one of the following alternatives: (1) acquire new equipment for $80,000 and continue to manufacture the part at the same variable cost, or (2) purchase the parts from an outside company at $4 per part. In the short run, the company should analyze the two decision alternatives by comparing the variable cost of manufacturing the parts:

• A) Plus $80,000, to the cost of buying the parts.
• B) To the cost of buying the parts less $10,000.
• C) Less $10,000, to the cost of buying the parts.
• D) To the cost of buying the parts.
• E) Plus $70,000, to the cost of buying the parts

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Definitions:

Glutamate

An important neurotransmitter in the brain involved in learning and memory.

Endorphins

Natural chemicals in the body that interact with brain receptors to reduce perception of pain and trigger positive feelings.

Sensory Input

Information received by the senses (sight, hearing, smell, taste, and touch) that is then processed by the brain to understand and interact with the environment.

Brain Structure

The arrangement of the various parts of the brain, including its cells and tissues, which is responsible for its functions and capabilities.