Answer the Following Question(s)using the Information Below

question 46

Multiple Choice

Answer the following question(s) using the information below.Mable's Engine Company manufactures part Z92 used in several of its engine models.Monthly production costs for 1,000 units are as follows:
Mable's Engine Company has the option of purchasing the part from an outside supplier at $61 per unit.It is estimated that all of the fixed overhead costs assigned to Z92 will remain if the company purchases Z92 from the outside supplier.
-The maximum price that Mables's Engine Company should be willing to pay the outside supplier is

• A)$43 per Z92 part.
• B)$38 per Z92 part.
• C)$61 per Z92 part.
• D)$59 per Z92 part.
• E)$64 per Z92 part.

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Definitions:

Pension Reserves

Funds set aside by an organization to meet future pension liabilities for its employees.

Money Market Securities

Short-term financial instruments that are considered relatively safe and liquid, including treasury bills, certificates of deposit, and commercial paper.

Highly Marketable

Describes assets or products that are easily sold or traded in the market due to high demand or liquidity.

Very Low Risk

Investments or financial strategies characterized by minimal potential for financial loss, typically associated with low returns.