Crispy Company Manufactures a Part for Its Production Cycle

question 11

Multiple Choice

Crispy Company manufactures a part for its production cycle.The annual costs per unit for 5,000 units of the part are as follows: The fixed factory overhead costs are unavoidable.Another company has offered to sell 5,000 units of the same part to Crispy Company for $15 per unit.The facilities currently used to make the part could be rented out to another manufacturer for $20,000 a year.Crispy Company should ________.

• A)make the part to save $1 per unit
• B)make the part to save $3 per unit
• C)buy the part to save $1 per unit
• D)buy the part to save $3 per unit

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Definitions:

Mislaid Property

Items that are intentionally placed somewhere by their owner and then forgotten, distinguishing from lost or abandoned property.

Lost Property

Items that have been unintentionally left by their owner at a place where they cannot be found.

Backpack

A portable container designed to be carried on one's back, typically secured with two straps over the shoulders.

Intangible Property

Assets that have no physical presence but have value, such as copyrights, trademarks, and patents.