Averette & Averette Averette & Averette, a Local Dental Practice, Currently Makes Its

question 24

Multiple Choice

Averette & Averette
Averette & Averette, a local dental practice, currently makes its own dentures for customers. The dental practice has one part-time employee who comes in weekly to make dentures. The employee is paid $150 per denture set. The direct materials and variable overhead cost per set of dentures is $75 and $25, respectively. In addition, the practice allocates $10 000 of fixed overhead to the denture-making department. The practice makes 1000 sets of dentures per year. An outside company who specialises in the making of dentures has offered to make each set of dentures for Averette & Averette for $255 per set.

-What are Averette & Averette's total relevant costs to make the dentures themselves?

• A) $150
• B) $250
• C) $260
• D) $100

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Definitions:

Dry Cleaners

A business that cleans clothing, textiles, and garments using a chemical solvent rather than water, often for items that cannot withstand the rigors of standard home laundering.

Computer-Integrated Manufacturing

A system of manufacturing in which all the processes are controlled by computers, resulting in reduced manual intervention and increased efficiency.

Flexible Manufacturing

An approach to production that allows for a range of products to be efficiently produced in varying volumes, adapting to market demands with flexibility in operations.