Safety Products Currently Outsources an Electrical Switch That Is a Component

question 112

Multiple Choice

Safety Products currently outsources an electrical switch that is a component in its sprinkler systems.The switches are purchased for $20 each.The company is considering making the switches internally and has conducted a study to determine the costs involved.The costs below are projected annual production costs: $$\begin{array} { | l |l l | } \hline \text { Unit-level material cost } & \$ & 3 \\\hline \text { Unit-level labor cost } & \$ & 2 \\\hline \text { Unit-level overhead } & \$ & 1 \\\hline \text { Batch-level set-up cost ( } 5,000 \text { units per batch) } & \$ 5,000 \\\hline \text { Product-level supervisory salaries } & \$ 37,500 \\\hline \text { Allocated facility-level costs } & \$ 20,000 \\\hline\end{array}$$ Assume that the company needs 15,000 of the switches,which would be produced in three batches.Assume also that the company will still be operating within the relevant range.If Safety decides to make the parts under these conditions,the total relevant costs will be:

• A) $132,500.
• B) $162,500.
• C) $105,000.
• D) $142,500.

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Definitions:

NREM-3 (N3)

The third stage of non-rapid eye movement sleep, characterized by deep sleep and the most difficult stage from which to be awakened.

Delta Waves

Slow brain waves predominantly observed in the deepest stages of sleep, representing a state of unconsciousness and regenerative rest.

N3 Sleep

The deepest stage of Non-REM (NREM) sleep, characterized by slow brain waves and considered essential for restorative sleep and memory consolidation.

Sleep Cycle

The progression through various stages of non-REM and REM sleep that occurs repeatedly during a typical night's rest.