Foster Industries Manufactures 20,000 Components Per Year

question 133

Multiple Choice

Foster Industries manufactures 20,000 components per year. The manufacturing cost of the components was determined as follows: If the component is not produced by Foster, inspection of products and provision of power costs will only be 10% of the current production costs; moving materials costs and setting up equipment costs will only be 50% of the production costs; and supervision costs will amount to only 40% of the production amount. An outside supplier has offered to sell the component for $25.50.
What is the effect on income if Foster Industries purchases the component from the outside supplier?

• A) $25,000 increase
• B) $45,000 increase
• C) $90,000 decrease
• D) $90,000 increase

Design incentive programs that reward both team and individual performance without fostering detrimental competition.

Explain Tom Rath and Donald Clifton's Theory of the Dipper and the Bucket and apply it to workplace dynamics.

Utilize effective thank-you letter writing principles following a job interview.

Understand the principles of Just-in-Time (JIT) manufacturing and Total Quality Management (TQM).