Answer the Following Question(s)using the Information Below

question 126

Multiple Choice

Answer the following question(s) using the information below.Schmidt Corporation produces a part that is used in the manufacture of one of its products.The costs associated with the production of 10,000 units of this part are as follows:
Of the fixed factory overhead costs, $30,000 is avoidable.
-Assuming no other use of their facilities, the highest price that Schmidt should be willing to pay for 10,000 units of the part is

• A)$210,000.
• B)$170,000.
• C)$110,000.
• D)$180,000.
• E)$140,000.

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Definitions:

Required Rate of Return

The minimum return an investor expects to earn on an investment, considering its risk level and alternative opportunities.

Margin

The difference between the selling price of a product or service and its cost, expressed as a percentage of the selling price.

Turnover

A measure of a company's sales or revenues relative to the average value of its assets, inventory, or employees.

Return on Investment

A measure of the financial gain or loss on an investment relative to the amount of money invested.