Beta Inc Can Produce a Unit of Zed for the Following

question 99

Multiple Choice

Beta Inc. can produce a unit of Zed for the following costs: $$\begin{array} { | l | r | } \hline \text { Direct material } & \$ 10 \\\hline \text { Direct labor } & 20 \\\hline \text { Overhead } & 50 \\\hline \text { Total costsper unit } & \$ 80 \\\hline\end{array}$$ An outside supplier offers to provide Beta with all the Zed units it needs at $58 per unit. If Beta buys from the supplier, it will still incur 40% of its overhead. Beta should:

• A) Buy Zed since the relevant cost to make it is $60.
• B) Make Zed since the relevant cost to make it is $60.
• C) Buy Zed since the relevant cost to make it is $80.
• D) Make Zed since the relevant cost to make it is $30.
• E) Buy Zed since the relevant cost to make it is $30.

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Definitions:

Test Reliability

The degree to which an assessment tool produces stable and consistent results over multiple administrations.

Divergent Thinking

An imaginative process or tactic employed to devise novel ideas by assessing an array of possible outcomes.

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A device around which clothes are hung for storage or display.

Heredity

The genetic transmission of characteristics from parents to offspring.