Copter Company Currently Produces a Key Part at a Total

question 26

Multiple Choice

Copter Company currently produces a key part at a total cost of $210,000.Annual variable costs are $170,000.Of the annual fixed costs,$10,000 relate specifically to this part.The remaining fixed costs are unavoidable. Another manufacturer has offered to supply the part annually for $190,000.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 Copter Company's lowest net relevant cost for the part?

• A)$130,000
• B)$170,000
• C)$180,000
• D)$190,000

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Definitions:

Genes

Basic units of heredity that are passed down from parents to offspring, containing DNA that determines characteristics and traits.

Endocrine System

A network of glands and organs in the body that produces, stores, and releases hormones to regulate various bodily functions and maintain homeostasis.

Adrenal Glands

Small, triangular glands located on top of both kidneys that produce a variety of hormones, including adrenaline and cortisol, which regulate metabolism, immune response, and stress responses.

Gonads

The primary reproductive organs in animals, specifically the testes in males and ovaries in females, responsible for producing gametes and sex hormones.