Bovee Company Manufactures a Part for Its Production Cycle

question 77

Multiple Choice

Bovee Company manufactures a part for its production cycle. The costs per unit for 10,000 units of this part are as follows:
The fixed factory overhead costs are unavoidable.
-Assume that Bovee can buy 10,000 units of the part from another producer for $120 each. The facilities currently used to make the part could be rented out to another manufacturer for $160,000 a year. Bovee should

• A) buy the part as that would save $24 per unit.
• B) buy the part as that would save $4 per unit.
• C) make the part as that would save $24 per unit.
• D) make the part as that would save $8 per unit.

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Definitions:

Manager

An individual responsible for planning, directing, and overseeing the operations and fiscal health of a business unit, department, or an organization.

Key Realities

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Small Business

An enterprise characterized by smaller staff numbers and lower revenue compared to larger corporations, often privately owned and operated.

Entrepreneurship Career Options

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