Harvey Automobiles Uses a Standard Part in the Manufacture of Several

question 116

Multiple Choice

Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 60,000 parts is $160,000, which includes fixed costs of $50,000 and variable costs of $110,000. The company can buy the part from an outside supplier for $3.00 per unit, and avoid 30% of the fixed costs. If Harvey Automobiles makes the part, how much will its operating income be?

• A)$55,000 greater than if the company bought the part
• B)$55,000 less than if the company bought the part
• C)$145,000 greater than if the company bought the part
• D)$145,000 less than if the company bought the part

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Definitions:

EEG

Electroencephalogram, a test that measures electrical activity in the brain.

Deep Sleep

A stage of sleep characterized by slow brain waves, known as delta waves, minimal physiological activity, and difficulty waking up; important for restorative processes.

Cerebral Aqueduct

The narrow channel in the brain connecting the third and fourth ventricles, allowing cerebrospinal fluid to flow between them.

Fourth Ventricle

A passageway within the brain that allows for the flow of cerebrospinal fluid between the brain's canals and the subarachnoid space.