Clinton Company Manufactures a Part for Its Production Cycle

question 23

Multiple Choice

Clinton Company manufactures a part for its production cycle.The costs per unit for 10,000 units of the part are as follows: The fixed factory overhead costs are unavoidable.Wilson Company has offered to sell 10,000 units of the same part to Clinton Company for $55 per unit.Assuming no other use for the facilities,Clinton Company should ________.

• A)make the part to save $4 per unit
• B)make the part to save $6 per unit
• C)buy the part from Wilson Company to save $4 per unit
• D)buy the part from Wilson Company to save $6 per unit

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Definitions:

Subduction Zone

Regions where one tectonic plate moves under another, often associated with volcanic activity and earthquakes.

Thrust Faulting

A geological fault in which the upper block, above the fault plane, moves up and over the lower block, commonly found in mountain ranges.

Accretionary Prism

A geological structure formed by the accumulation of sediments and rock fragments at a convergent tectonic plate boundary.

Subduction Zone

A region of the Earth's crust where tectonic plates converge, and one plate moves under another, leading to volcanic activity.