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Figure 13-2. ColorPro uses part 87A in the production of color printers. Unit manufacturing costs for part 87A are:
ColorPro uses 100,000 units of 87A per year. Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12. Fixed overhead is unavoidable.
-Refer to Figure 13-2. Which of the following is a qualitative factor that might affect ColorPro's decision?
Accounting Basis
The method in which income and expenses are recognized in the accounts; common methods include cash basis and accrual basis accounting.
Computation
The process of performing mathematical calculations or processing data using algorithms, often carried out by computers.
Average Accounting Return
A financial ratio that reflects the average net income that a project or investment generates compared to its initial cost or average investment.
Arbitrary Value
An arbitrary value is a value assigned based on discretion or judgment rather than from an objective calculation or measurement.
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