Sharp Corporation Produces 8,000 Parts Each Year,which Are Used in the Production

question 191

Multiple Choice

Sharp Corporation produces 8,000 parts each year,which are used in the production of one of its products.The unit product cost of a part is $36,computed as follows:
The parts can be purchased from an outside supplier for only $28 each.The space in which the parts are now produced would be idle and fixed production costs would be reduced by one-fourth.Based on these data,the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:

• A) $24,000
• B) ($24,000)
• C) $56,000
• D) ($56,000)

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Definitions:

Triple Bottom Line

An accounting framework that goes beyond the traditional profit measure to include social and environmental dimensions.

Company Values

The core principles and beliefs that guide the behaviors, decision-making processes, and cultural environment of an organization.

Reinforce

The action of strengthening or supporting an idea, value, or physical structure to ensure its endurance or credibility.

CEO Activism

The actions and efforts of chief executive officers to publicly address and influence social, environmental, and political issues outside of their company's immediate business interests.