Match Company Produces a Part That Is Used in the Manufacture

question 89

Multiple Choice

Match Company produces a part that is used in the manufacture of one of its products.The costs associated with the production of 5,000 units of this part are as follows: Of the fixed factory overhead costs,$72,000 are avoidable.Today Company has offered to sell 5,000 units of the same part to Match for $86.40 per unit.Assuming there is no other use for the facilities,Match Company should ________.

• A)make the part to save $24,000
• B)make the part to save $72,000
• C)buy the part to save $24,000
• D)buy the part to save $72,000

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Definitions:

Teamwork

The collaborative effort of a group to achieve a common goal or to complete a task in the most effective and efficient way.

Door-in-the-face Technique

A persuasion strategy whereby a large, unreasonable request is made first with the expectation it will be refused, followed by a smaller, more reasonable request.

Ideology

Ideology refers to a set of beliefs, values, and ideas held by an individual or group, often providing a framework for political, cultural, and social attitudes.

Income Redistribution

A policy or process, often implemented through taxation and government spending, aimed at reducing economic inequalities by distributing wealth from the richer segments of society to poorer ones.