Answer the Following Question(s)using the Information Below

question 77

Multiple Choice

Answer the following question(s) using the information below.John's 8-year-old Chevrolet Trail Blazer requires repairs estimated at $6,000 to make it roadworthy again.His wife, Sherry, suggested that he should buy a 5-year-old used Jeep Grand Cherokee instead for $6,000 cash.Sherry estimated the following costs for the two cars:

-Koch Brothers purchased a new production machine for $200,000.It is capable of producing 400,000 units over its useful life, thus the manufacturer's salesperson claimed the unit cost would only be $0.50.Koch's own engineers recommended that the company acquire a machine that would have a unit cost of production of no more than $0.48 (with a $0.03 variance) .A competitor of the vendor, who also was trying to sell Koch some equipment, claimed that the $0.50 is understated by $0.04 per unit.The total anticipated demand over the asset's useful life is 300,000 units.Relevant information includes

• A)the $0.50 unit cost.
• B)the fact that the $0.50 falls below the $0.48 + $0.03 variance.
• C)the unit cost at Koch's planned capacity utilization.
• D)being able to produce at excess capacity.
• E)the different unit costs of production between the two vendors' machines.

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Definitions:

Wealth And Power

The possession of significant financial resources and the ability to influence or control the behavior of others, often seen in societal and economic contexts.

Freedom Of Choice

The ability or right of individuals to make their own choices without external constraints.

Continual Need

A perpetual or ongoing requirement for something, which could be emotional, physical, social, or psychological in nature.

Unconditional Positive Regard

An attitude of total acceptance and support, regardless of what a person says or does, often used in client-centered therapy.