Deuce Company Currently Produces 10,000 Units of a Key Part

question 55

Multiple Choice

Deuce Company currently produces 10,000 units of a key part at a total cost of $512,000 annually.Variable costs are $300,000 annually.Of the annual fixed costs,$140,000 relate specifically to this part.The remaining fixed costs are unavoidable. Another manufacturer has offered to supply the part for $48 per unit.The facilities currently used to manufacture the part could be used to manufacture a new product with an expected contribution margin of $30,000 per year.Alternatively,the facilities could be rented out at $60,000 per year.Given all of these alternatives,what is Deuce Company's lowest net relevant cost per unit for the part?

• A)$30
• B)$42
• C)$44
• D)$48

---

Definitions:

Collecting Information

The process of gathering data or facts relevant to a specific purpose or investigation.

Calm, Reassuring Voice

A technique used in communication and caregiving to convey support and comfort, often aiding in reducing anxiety or distress.

Document Details

Specific information recorded on a document, including but not limited to content, authorship, and date of creation.

Female Victim

A term used to describe a woman or girl who has suffered harm, abuse, or victimization.